The countdown to the UK General Election is nearly up, with polling taking place this Thursday 4th July. With this in mind we decided to take another look at how each of the major parties’ manifestos addressed some of the key issues in fintech.
Innovation
Conservatives and Lib Dems have pledged to increase public spending on R&D. Tories said their aim is increase it to £22 billion a year, up from £20 billion this year. This is accompanied by maintaining their current R&D tax relief programme.
The aim of the Lib Dems is at least 3% of GDP to be invested in R&D by 2030, rising to 3.5% by 2034.
Lib Dems have also said they want to power scale-up companies, especially outside of London and the South East, using innovative ways of ‘crowding-in’ private sector investment.
In their manifesto Labour does not explicitly mention R&D tax relief programme but they do state they “will scrap short funding cycles for key R&D institutions in favour of ten-year budgets that allow meaningful partnerships with industry.”
Labour also stated they will work with universities and industry to ensure startups will have access to finance they need to grow.
Regulation
Labour want to create a new Regulatory Innovation Office to help with the development of new technologies. They claim this could help update regulators update regulation, speed up approval timelines, and co-ordinate issues that span existing boundaries.
The Conservatives said they support the implementation of the Mansion House reforms and they will “maintain the highest standards of consumer protection and prudential regulation to ensure there can never be a repeat of the banking crisis under the last
Labour Government.”
Financial crime
Conservatives will continue with the National Fraud Squad and will also ban SIM farms, which are used to send fraudulent texts, and cold calls on financial products.
Labour plan to introduce a new expanded fraud strategy to tackle threats including online, public sector and serious fraud. They have also stated they will work with technology companies to stop platforms being used by criminals.
The FT has reported they have drafted plans to make technology companies liable to reimburse victims of online fraud.
The Lib Dems were more detailed in their plans, with the proposal of creating a new Online Crime Agency, which among other things will tackle personal fraud.
Lib Dems also laid out plans to combat the rise of fraud and scams: naming and shaming banks with the worse records on preventing fraud and reimbursing victims; requiring banks to reimburse victims of automated push payment scams unless there is clear evidence
that they are at fault; and launching a high-profile public awareness campaign to help people spot, avoid and report frauds and scams.
Artificial intelligence
The Conservatives have in the past taken pride in driving AI development, such as through the
AI Safety Summit. They stated in their manifesto AI “will accelerate human progress in the 21st century, just as the steam engine and electricity did in the 19th century” and pledged to continue to invest in large-scale compute clusters and support research
into its safe and responsible use.
Labour also addressed AI, saying they will ensure their industrial strategy supports AI development. They plan to remove barriers to new datacentres and create a National Data Library to bring together existing research programmes, mostly focusing on data-driven
public services.
Financial inclusion and branch banking
Conservatives stated they “have legislated to require banks and building societies considering closing a branch to consider the needs of all their customers and ensure they continue to have appropriate access to cash in their local community.” They have
also announced over 100 banking hubs for the public to access cash and everyday banking services.
Labour have also taken a focus on shared banking hubs,
pledging to open 350.
The Lib Dems plan to introduce a national financial inclusion strategy. It will require both the FCA and the PRA to have regard to financial inclusion, such as protecting access to cash, especially in remote areas, supporting banking hubs, expanding access
to bank accounts, delivering Sharia-compliant student finance, and supporting vulnerable consumers.
SMEs
Labour and the Lib Dems both proposed an expansion of the British Business Bank, to ensure SMEs have access to capital. Labour specified reforming the British Business bank to include a stronger mandate to support growth in the regions and nations.
Lib Dems said they would work with major banks to fund the creation of a local banking sector dedicated to meeting the needs of SMEs.
Reform said in their first 100 days they would lift corporation tax minimum profit threshold to £100K.
Open banking and open finance
Labour stated they will support open banking and open finance and ensure a pro-innovation regulatory framework.
Conservatives have said they will expand open finance, with the backdrop of supporting access to finance for SMEs.
CBDC
Notably, Reform UK stated they oppose CBDC and are standing against cashless societies.
Other manifestos did not make mention of CBDC or digital pound, but as mentioned Conservative want access to cash through banking hubs and Lib Dems assured they will protect access to cash.