The government’s flagship City reform initiatives, including the rollout of the British ISA and the Pisces private market, face uncertainty following Prime Minister Rishi Sunak’s decision to hold an early election in July.
Over the past two years, ministers have pursued significant changes to City policy, but consultations on these landmark plans are now at risk as political focus shifts towards the upcoming election.
Treasury sources confirmed that the government has already shelved the much-anticipated retail sale of its stake in NatWest, previously touted as a means to revitalise retail investment in the UK. Chancellor Jeremy Hunt had announced plans for a British ISA to encourage British investors to support the stock market through tax breaks. However, the response to the consultation, which was due to run until 6 June, will be delayed until after the election.
Labour has yet to comment on the British ISA plans, and it remains unclear if the party will support the reforms if elected. A Treasury source indicated that “everything is under review.”
Other measures affected include the Pisces market, a proposed hybrid public-private stock exchange designed to provide private companies with better access to UK capital markets. The market, developed in conjunction with the London Stock Exchange, was aimed for launch later this year. City Minister Bim Afolami highlighted the platform’s potential to bridge the gap between public and private markets. However, a consultation on the plans ended on 17 April, and the Treasury has not yet published a response. Labour has not formally supported the initiative, and the Treasury did not comment on its future.
The snap election has disrupted the government’s wider legislative agenda, forcing Parliament into a so-called wash-up period, where a limited number of bills are prioritised before it is prorogued. This situation casts doubt on several key areas of the reform package, including an anticipated update on pension investment plans from Jeremy Hunt at the Mansion House summit in July.
While some reforms, such as changes to listing rules, will proceed as planned this summer, many of the government’s ambitious City reform efforts now hang in the balance. This uncertainty poses a potential setback to the Conservative Party’s business strategy and its appeal to investors and stakeholders in the financial sector.
