On 13 June, the Labour Party launched their election manifesto. To help you navigate the 136-page manifesto, Innovate Finance trawled through the pages to produce a summary of what the party has pledged on issues relevant to the FinTech sector. 

Quick take 

There was a sizeable focus on the financial services sector and its role in delivering Labour’s plans for the UK if they form the next government. FinTech was not specifically mentioned. However, policy areas such as Open Banking and Open Finance are highlighted as key to delivering their plans. 

The most important issues relevant to our sector include a commitment to making regulators more efficient, tackling fraud, increasing investment and improving access to capital. The role of our sector in delivering Net Zero ambitions was also explored. 

A series of tax commitments were also announced. Income tax, National Insurance and VAT will not be raised. Corporation tax will be capped at the current rate of 25% while the non-dom status will be abolished. Changes to inheritance tax and capital gains tax were also announced (see more below). 

If you would like to learn more about Labour’s plan for financial services in greater detail, please look at Labour’s Plan for Financial Services which was published in January, or read our analysis of their plans here. 

Key pledges relevant to FinTech

Labour called financial services “one of Britain’s greatest success stories” and pledged to create the conditions to support innovation and growth in the sector. To do so, they will support new technology, including Open Banking and Open Finance while ensuring a pro-innovation regulatory framework.

Here’s what they have pledged:

• Regulators and regulation: A new Regulatory Innovation Office will be created, bringing together existing functions across government. This Office will help regulators update regulation, speed up approval timelines, and co-ordinate issues that span existing boundaries. Labour considers this necessary as “regulators are currently ill-equipped to deal with the dramatic development of new technologies, which often cut across traditional industries and sectors”.

• Fraud: Noting that fraud accounts for almost two in five crimes, a new expanded fraud strategy to tackle various threats, including online fraud will be introduced. Labour have pledged to work with technology companies to stop their platforms being exploited by fraudsters. 

• Investment: Labour will act to increase investment from pension funds in UK markets and adopt reforms to ensure that workplace pension schemes take advantage of consolidation and scale. They will also undertake a review of the pensions landscape to consider steps needed to improve pension outcomes and increase investment in UK markets.

• SME lending and ‘levelling up’: Reform of the British Business Bank will be undertaken to make it easier for SMEs to access capital. This will include a stronger mandate to support growth in the regions and nations.

• Artificial intelligence (AI): Labour have pledged to ensure its industrial strategy supports the development of AI. They will introduce binding regulation “on the handful of companies developing the most powerful AI models” to ensure the safe development and use of AI models. 

• Energy and heating: Labour have committed themselves to working with the private sector, including banks and building societies, to provide further private finance to accelerate home upgrades and low carbon heating.

• Green finance and Net Zero: To make the UK the green finance capital of the world, UK-regulated financial institutions will be mandated to develop and implement credible transition plans that align with the 1.5°C goal of the Paris Agreement.

• Financial literacy: Labour noted that every child should have a broad curriculum with “support to develop essential digital, speaking, and creative skills”. To deliver this, they will launch an expert-led review of curriculum and assessment. 

Not explicitly touched on in their manifesto, Labour’s Plan to Make Work Pay: Delivering A New Deal for Working People which was published in May, covered the “right to switch off”. Labour will follow similar models to those that are already in place in Ireland or Belgium. This will give workers and employers the opportunity to have constructive conversations and work together on bespoke workplace policies or contractual terms that benefit both parties.

Key tax commitments

Labour have made the following tax commitments in their manifesto: 

• Income tax, National Insurance and VAT: All three will not be raised. 

• Corporation tax: Corporation tax will be capped at the current level of 25% for the entire Parliament. If tax changes in other countries pose a risk to UK competitiveness, Labour will act. They will retain a permanent full expensing system for capital investment and the annual investment allowance for small business.

• Business tax: No specifics appear to have been given, but a roadmap for business taxation for the next parliament will be published.

• Non-dom: The non-dom status will be abolished. This will be replaced by “a modern scheme for people genuinely in the country for a short period”. 

• Inheritance tax: The use of offshore trusts to avoid inheritance will be ended. 

• Capital gains tax: The “carried interest tax loophole” will be closed. 

• Business rates system: The business rates system will be replaced. 

Got views? Get in touch 

The team wants to hear from members, stakeholders, and wider networks across FinTech. If you have views or concerns, please feel free to email us with your thoughts at policy@innovatefinance.com. 

Innovate Finance policy team:

Adam Jackson - Chief Strategy Officer

Paul Worthington - Head of Regulatory Affairs

Mike Carter - Senior Policy Advisor

Megan Jenkins - Policy and Public Affairs Manager

Christopher Foo - International Policy Associate

Jago Corry - Policy Associate