The Edinburgh Reforms

Treasury Committee Closed Inquiry
Opened: 26 Jan 2023 Closed: 28 May 2024 Parliament page
An inquiry into the financial services reforms announced by the Chancellor of the Exchequer on 9 December 2022. The large numbers of announcements comprising the Edinburgh Reforms are wide-ranging and at different stages of the policy-formation process. The Committee will consider elements of the reforms as they progress in the … Read more
3 Recommendations
15 Conclusions
1 Report
3 Letters
1 Event
Activity timeline 7 events
26 Apr
2024
Report published
21 Feb
2024
Report published
8 Dec
2023
Report published
24 Oct
2023
Correspondence
24 Oct
2023
Correspondence
7 Mar
2023
Correspondence
1 Feb
2023
Formal meeting (oral evidence session) · The Thatcher Room, Portcullis House
Title HC No. Published Items Response
Second Report - Edinburgh Reforms One Year On: Has Anything Chan… HC 221 8 Dec 2023 18 Responded
Recommendations & Conclusions
18 results
1 Conclusion Rejected
Second Report - Edinburgh Reforms …
Completing Edinburgh Reforms is a vital step to address over-zealous regulation.
The full Committee has previously concluded in its report on the Future of financial services regulation that “there should be a secondary objective for both the Financial Conduct Authority and the Prudential Regulation Authority to promote long-term economic growth” but … Read more
Government Response
The government rejects the committee's conclusions, asserting that the Edinburgh Reforms will have a substantial impact, cannot be delivered faster, and are progressing well, with 21 of 31 commitments already delivered as of October 6.
HM Treasury
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2 Conclusion
Second Report - Edinburgh Reforms …
Economic growth best promoted by a strong, well-regulated, resilient financial services sector.
The Sub-Committee agrees with the Treasury that the UK’s regulators should consider economic growth when designing new regulations, and the best way to promote economic growth in the UK is through a strong, well respected, independently regulated, and financially resilient … Read more
HM Treasury
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3 Conclusion Not Addressed
Second Report - Edinburgh Reforms …
Concerns about risks of wider retail investment in Long-Term Asset Funds persist.
The Sub-Committee has raised concerns with the FCA about the risks to widening retail investment in Long-Term Asset Funds, since they are riskier non-liquid assets. These concerns are in part formed by our work looking into the failure of London … Read more
Government Response
The government's response focuses on the Advice Guidance Boundary Review consultation to improve consumer access to affordable advice in the retail investment market, without directly addressing the specific concerns raised about Long-Term Asset Funds and protections against misuse of investor exemptions.
HM Treasury
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4 Conclusion
Second Report - Edinburgh Reforms …
Continued support for appropriate pension scheme consolidation remains the Committee's view.
In our July 2023 report on venture capital funding we concluded that we were in favour of pension scheme consolidation where appropriate. Our view has not changed since. We therefore restate our conclusion on pension scheme consolidation in this report: Read more
HM Treasury
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5 Conclusion
Second Report - Edinburgh Reforms …
Urge Government to urgently progress work on pension fund consolidation proposals.
Our evidence suggests that UK pension funds may be an untapped source for a deeper domestic capital market more inclined to risk investment in high-potential businesses. We welcome the Government’s announcement of work on pension fund consolidation in the autumn. … Read more
HM Treasury
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6 Recommendation Not Addressed
Second Report - Edinburgh Reforms …
Continue monitoring market impact of the new consolidated tape by Government and regulators.
The Sub-Committee remains sceptical that a government-approved monopoly for providing data to market participants through a consolidated tape is good for competition. Once a monopoly were granted, the incumbent would have little incentive to reduce costs or to innovate. Given … Read more
Government Response
The government notes that the Financial Conduct Authority (FCA) published rules for a UK consolidated tape for bonds, but does not directly address the recommendation to monitor its impact on market forces.
HM Treasury
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7 Conclusion Rejected
Second Report - Edinburgh Reforms …
Treasury's initial actions are preparatory work, not delivered financial services reforms.
While the Treasury has delivered what it set out to do in these six strands of work, namely publishing documents, welcoming a regulatory consultation, and establishing reviews or taskforces, none of these are in of themselves reforms to the UK’s … Read more
Government Response
The government rejects the committee's conclusion, asserting that the Edinburgh Reforms are substantial and cannot be delivered faster, emphasizing that regulatory change is a multi-step process involving consultation and that 21 of 31 commitments have already been delivered.
HM Treasury
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8 Conclusion
Second Report - Edinburgh Reforms …
Explore small changes to ring-fencing framework, but only remove with substantial evidence.
Based on the evidence the Sub-Committee has heard, there is the potential for small changes to the ring-fencing framework to improve its interoperability with the PRA’s resolution regime, but any longer-term plans to eventually remove the ring-fencing regime entirely should … Read more
HM Treasury
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9 Conclusion
Second Report - Edinburgh Reforms …
Continued viability of building societies and mutuals is vital for a strong financial sector.
The continued viability of building societies and mutuals is of high importance to the Committee. A diverse, competitive and vibrant financial services sector is strengthened by the presence of mutuals and building societies.
HM Treasury
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10 Conclusion
Second Report - Edinburgh Reforms …
Prioritise progress on secondary legislation for building society mutual deferred shares.
Given that Parliament has expressed its will through the Mutual Deferred Shares Act 2015 that building societies should be able to raise finance through mutually deferred shares, the Committee expects the Government to address the lack of progress made on … Read more
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11 Conclusion
Second Report - Edinburgh Reforms …
Significant problems identified within the PRIIPS regime and wider cost disclosures.
There is consensus among the Treasury, industry, and the Financial Conduct Authority that there are problems within the Packaged Retail and Insurance-based Investment Products (PRIIPS) regime in addition to a wider problem with cost disclosures. Such an example can be … Read more
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12 Conclusion Rejected
Second Report - Edinburgh Reforms …
Edinburgh Reforms achievements fail to make substantial difference to UK economy.
The Chancellor’s Edinburgh Reforms speech made big promises. However, from what has been completed so far, the Sub-Committee is of the view that none of the achievements to date will make a substantial difference to the UK economy.
Government Response
The government rejects the conclusion, stating that 21 of 31 Edinburgh Reform commitments have been delivered and asserts that these reforms will substantially impact the UK economy and financial services sector, promoting growth and competitiveness.
HM Treasury
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13 Conclusion Rejected
Second Report - Edinburgh Reforms …
Many Edinburgh Reforms are preparatory work, not substantial regulatory changes.
Many of the strands of work included in the Edinburgh Reforms are not reforms, but are more preparatory work for potential reforms in the future and should be 28 Edinburgh Reforms One Year On: Has Anything Changed? treated as such. … Read more
Government Response
The government rejects the committee's conclusion that many Edinburgh Reforms are merely preparatory work or lack significant impact, asserting that the reforms are substantial and that 21 of 31 commitments have already been delivered to promote growth and competitiveness.
HM Treasury
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14 Conclusion Rejected
Second Report - Edinburgh Reforms …
Excessive delays in implementing Treasury financial services policy changes observed.
The Sub-Committee understands and supports the Treasury in carrying out reforms that follow the appropriate processes. Reforms to the financial services rules should be evidence-based, taking into consideration views from both industry and wider society. This engagement takes time and … Read more
Government Response
The government rejects the committee's conclusion that the implementation of reforms takes too long, arguing that delivering ambitious regulatory change is a multi-step process requiring careful work and consultation, and asserts that 21 of 31 Edinburgh Reforms commitments have already been delivered.
HM Treasury
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15 Recommendation Accepted
Second Report - Edinburgh Reforms …
Prioritise financial services reforms that boost economic growth and protect consumers.
The Treasury’s priorities in its financial services reform plan should be reforms that will make the most difference to the UK’s economic growth, and reforms that prevent harm to consumers and businesses, making sure they are provided with well-designed, suitable … Read more
Government Response
The government implicitly accepts the need for reforms that promote growth and protect consumers, claiming the current wide-ranging package is already achieving this. They cite the Advice Guidance Boundary Review consultation as a significant step towards ensuring consumers receive affordable financial advice.
HM Treasury
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16 Recommendation Rejected
Second Report - Edinburgh Reforms …
Ensure sustained pace for moving onshored rules into financial regulators' rulebooks.
The Treasury and the regulators have told us the process of moving the onshored rules into the regulators’ rule books will take many years. The regulators and the Treasury must ensure that there is a sustained and focussed pace of … Read more
Government Response
The government rejects the recommendation for a faster pace of change, stating that the reforms cannot be responsibly delivered any quicker and are well underway, with 21 of 31 commitments already delivered.
HM Treasury
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17 Conclusion
Second Report - Edinburgh Reforms …
Duplication of work with proposed Lords Financial Services Regulation Committee must be avoided.
The Sub-Committee notes the proposed establishment of a Lord’s Committee on Financial Service Regulation. While its remit is a matter for the House of Lords, duplication of work should be avoided. The Sub-Committee will continue to carry out its scrutiny … Read more
HM Treasury
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18 Conclusion
Second Report - Edinburgh Reforms …
Regulators' cost benefit analysis consistently fails to capture full costs for firms.
The Financial Services and Markets Act 2023 legislated for the creation of Cost Benefit (CBA) Panels dedicated to supporting the regulators in producing cost benefit analysis for each of their reforms. The Sub-Committee has consistently been of the view that … Read more
HM Treasury
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Government Response AI assessment · 9 of 3 classified
Accepted 1
Not Addressed 2
Rejected 6
Total 3 recs + 15 conclusions
Correspondence 3 letters
24 Oct 2023 Correspondence to the Chancellor of the Exchequer relating to progress with Edinburgh Reforms, dated 6 September
Parliament page
24 Oct 2023 Correspondence from the Chancellor of the Exchequer relating to progress with Edinburgh Reforms, dated 6 October 2023
Parliament page
7 Mar 2023 Correspondence from the Economic Secretary to the Treasury, relating to the publication of the Call for Evidence on aligning the ring-fencing and resolution regimes, dated 2 March
Parliament page