A new Government: General Election FinTech Morning Newsflash – 6am update From Innovate Finance Policy Team

Britain has elected a Labour Government with a sizeable majority, led by Keir Starmer and with Rachel Reeves as Chancellor of the Exchequer.

The overarching mission of the Government will be to grow the economy. With tax cuts and spending increases largely ruled out, growth will need to come from targeted supply side reforms in terms of regulation (reducing regulatory obstacles and introducing regulation that stimulates innovation and growth) and encouraging private investment (including pension fund investment in the UK economy). This should create opportunities for FinTech.

In terms of FinTech and financial services policy, in many respects we can expect to see continuity of policy direction, with perhaps an even greater drive to push forward reforms that can unlock economic growth (including making regulators support growth and innovation). Areas already identified as likely to be early priorities are open finance, regulatory innovation and increasing investment by institutional and individual investors in UK capital markets.

Further details on the election and what it means for FinTech below.

Results at 5:30am on 5 July

Exit poll (issued at 22:00 on 4 July)

This is the prediction based on polling of voters in 130 constituencies yesterday.

As it stands…

• We will have a Labour government with a substantial majority in the Commons, providing the party with a powerful mandate to deliver on its five missions for the country.
• Outgoing Chancellor of the Exchequer Jeremy Hunt and Conservative leader Rishi Sunak have been reelected in their constituencies.
• Rishi Sunak has conceded the election to Labour, but despite widespread losses, the Conservatives will remain the second largest party and form the official opposition. An election to select the party's next leader is looking likely to take place over the summer with candidates expected to come forward from all wings of the party.
• Outgoing Economic Secretary to the Treasury, Bim Afolami has lost his seat in a Labour gain for Rachel Reeves’ Parliamentary Private Secretary Alistair Strathern.
• Cabinet members to lose their seats so far include Michelle Donelan (Science, Innovation and Technology Secretary), Grant Shapps (Defence Secretary) and Gillian Keegan (Education Secretary).
• The Liberal Democrats have made gains in Conservative heartlands across the South of England and will likely form a substantial bloc on the green benches of the Commons. Reform UK has also gained further representation in Westminster with a gain of 4 seats so far.

What happens next?

Keir Starmer will meet with King Charles at Buckingham Palace later today where he will be formally asked to form a government and then deliver a victory speech, likely on the steps of 10 Downing Street.

Following this, we expect Ministerial appointments to be made gradually over the weekend, with the Great Offices of State announced first: Chancellor, Foreign Secretary and Home Secretary; followed by other Secretaries of State and junior ministers.

What does a Labour government mean for FinTech?

Labour has 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.

Their manifesto pledges which are relevant to FinTech include:

• Regulators and regulation: A new Regulatory Innovation Office will help regulators update regulation, speed up approval timelines, and co-ordinate issues that span existing boundaries.

• Fraud: 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: Increase investment from pension funds in UK markets and adopt reforms to ensure that workplace pension schemes take advantage of consolidation and scale. A review of the pensions landscape to consider steps to increase investment in UK markets.

For a full overview of Labour’s key pledges relevant to FinTech in their 136-page manifesto, read our analysis here.

To learn more about Labour’s plan for financial services in greater detail, see also the Innovate Finance analysis of the Labour Financial Services Review here.

We will be back at 4:00pm with a further update on the results and details on our plans for engaging with the next government