What Liz Truss’ appointment as Prime Minister means for the UK financial community

By Gaia Lamperti

After winning the Conservative leadership contest, on Monday September 5th, former foreign secretary Liz Truss has become the new Prime Minister of the United Kingdom. But what will this appointment mean for the financial community?

Before the election, Truss promised to take immediate action in order to help people with the challenges in the current period of recession. This means cutting taxes, putting money back into people’s pockets and unshackling the country’s businesses from burdensome taxes and unsuitable regulations.

Commenting on her commitment to tackling the financial crisis, Michael Kill CEO of NTIA, an association representing nighttime industries, said: “It is now vital that the new Prime Minister takes this opportunity to be decisive in tackling the cost inflation crisis,  by reducing VAT across the board, extending business rates relief and implementing an energy cap for small medium enterprise businesses.”

“Over the coming weeks, without an effective intervention from the Government, we will see thousands of businesses go to the wall and millions of jobs lost,” he added.

Economic growth is another key focus of Truss’ agenda as she publicly declared her vision pro-growth. Her cabinet will look into creating the conditions for business investment and innovation to flourish, which in turn will contribute to providing jobs and wealth and reduce the country’s debt-to-GDP ratio in the long term.

“Covid, unfortunately, showed that when a financial crisis hits, as a nation and a government we revert to type by giving precedence to the incumbent institutions. There was a missed opportunity to deliver the stated goal of greater lender competition, choice and product innovation,” Simon Cureton, CEO of financial consultancy Funding Options, said.

“We face a global funding gap, only exacerbated by the energy crisis, and SMEs remain central to every world economy. The more we do to foster an environment in which small businesses are helped and not hindered, the better it will be for the UK, business owners, and the fintech community’s ability to export its prowess to other major economies.”

“There are reasons why the UK’s financial sector is so admired overseas, not least the rule of law, regulation and expertise that resides within the Square Mile and beyond. Her promised ‘war on technocrats’ should be handled with care, but this represents a chance to position the UK as a leader in realising the benefits of Open Banking and embracing the technologies that will make lender decision-making faster and more robust than ever,” he added.

More specifically related to the FinTech segment of financial services, Cureton added: “We welcome Liz Truss’ evident passion for the City as a ‘jewel in the crown’ and trust that she has the FinTech community in mind as much as the incumbent institutions as she sets out her economic agenda in the months that follow. When Sir Ron Kalifa’s review of UK FinTech was published last year, she recognised there are many opportunities to make the UK the epicentre of financial innovation and pointed to boosting our presence in global markets, something we hope she takes with her from the foreign office.”

Agreeing on the favourable attitude towards FinTech that the new government can spur, Chaim Hack, Head of Business Development at FinTech company Coremont, said: “Actions always speak louder than words and in the coming weeks and months we will get some clues as to what agenda the new Conservative government will put in place and how it will support the fintech sector. Whether it is Chase digital bank setting up in Birmingham or local firms such as Revolut growing at pace, the UK FinTech sector still has huge unearthed potential.”

“Indeed, UK FinTech companies received £7.6bn in funding during the first half of 2022, the second-largest globally after the £20.8bn raised by US firms. Furthermore, data compiled by industry body, Innovate Finance, showed that for the first half of the year, global fintech investment reached £57.6bn. The opportunity to turbocharge the FinTech industry and grow it significantly more is there – now it is down to PM Truss to enact the policies.”