How will the Burnham Government impact financial services policy and regulation  

Burnham means evolution, not a revolution for financial services 

• While the change in Prime Minister will alter the Government's political priorities, firms should expect broad continuity across the UK's financial services agenda rather than a fundamental change in direction. 

• The return of familiar faces to HM Treasury is a clear signal that Burnham and Healey intend to build on, rather than reset the approach to financial services policy. Lucy Rigby's return to the City Minister brief, now as a Minister of State, gives firms an opportunity to pick up conversations where they left off and engage with a minister likely to have greater authority over the portfolio. 

• Regulators will be watching closely for shifts in tone on competitiveness but both Nikhil Rathi and Katharine Braddick accept the need to support international competitiveness while delivering against their wider objectives.  

The focus is shifting from designing reforms to delivering them 

• With the Leeds Reforms now moving into implementation, the Government's attention is shifting from announcing new reforms to delivering existing commitments. However, new reforms on auto enrolment, simplified advice and LISA are likely to emerge.  

• The Financial Services and Markets Bill will be the principal legislative vehicle for the sector over the coming year. As it progresses through Parliament, debate is likely to focus on politically salient consumer issues, including Consumer Credit Act reform, access to banking and reforms to the redress framework. 

• While Parliament will shape the legislation, much of the detail will ultimately be determined through FCA consultation and rulemaking, making engagement throughout the legislative and implementation process equally important. 

The next wave of reforms is already taking shape with AI at the top of the list 

• Although ministers are unlikely to reopen the major reform programmes announced over the past two years, work is already beginning on the next generation of policy priorities. 

• Early areas of focus include AI and the regulatory perimeter, agentic payments, and wider digital finance reforms. Firms that engage early will be better placed to shape these debates before policy positions become fixed. 

Growth remains important, but the politics will increasingly focus on the cost of living 

• In his early engagement with business leaders, Healey has stressed the importance of creating the conditions for firms to invest, innovate and grow, signalling broad continuity with HM Treasury's existing growth and competitiveness agenda. 

• However, Burnham has also made clear that easing pressure on household finances will be a defining political priority. While the substance of financial services policy may change little, the political narrative is likely to shift towards demonstrating how reforms improve consumer outcomes, support the real economy and raise living standards. 

• This is likely to influence regulatory prioritisation, with sectors such as consumer credit, insurance and retail banking facing greater scrutiny where reforms or market practices are perceived to affect consumers. The FCA can use its wide ranging Consumer Duty to put pressure on firms to deliver outcomes for consumers.  

• For firms, the strongest advocacy will increasingly be demonstrating how a policy landscape that supports investment and innovation also improves outcomes for households and businesses throughout the UK. 

Fiscal constraints will shape the Chancellor's first Budget 

• Burnham has signalled an ambitious domestic agenda, with priorities including social care reform, fiscal devolution and tackling economic inactivity. The Chancellor has said that the Budget, to be delivered on Wednesday 28 October, will be one that “moves money and power out of Westminster”. Delivering these commitments will place significant pressure on the public finances. 

• At the same time, the Government has committed to maintaining the manifesto tax lock, ruling out increases to income tax, employee National Insurance and VAT. Burnham has also said that he will adhere to Rachel Reeves' fiscal rules, including the requirement that day-to-day spending is funded through tax revenues. However, there are reports that the Government is exploring how investment by public financial institutions – such as the National Wealth Fund and the British Business Bank – could receive a more favourable fiscal treatment.  

• These competing commitments leave the Chancellor with limited fiscal headroom, meaning more difficult choices over taxation and spending are likely to be considered and part of Healey’s first Budget. 

• For financial services firms, this creates uncertainty around whether the sector could face additional direct or indirect tax burdens. There has already been renewed speculation around increasing the bank surcharge or introducing new banking levies, following similar discussions ahead of the 2025 Autumn Budget. Separately, there is speculation that Government may look at taxing income from ‘wealth’ more, which could signal capital gains tax, inheritance tax and property tax reforms. The Government may also be minded towards further pensions tax changes beyond limits to pensions salary sacrifice which were announced in last year’s Budget and are due to come into force from April 2029. These could all affect the investment climate in the UK.  

• With the Budget date still some way away, it is unlikely that any final decisions have been made. As part of their decision-making process, ministers will carefully look at the evidence on the fiscal and economic impacts of reforms, so there is an opportunity to inform the debate. 

Defence, devolution and regional investment will reshape engagement opportunities 

• Beyond financial services policy itself, defence, devolution, industrial strategy and regional investment are likely to become defining themes of the Burnham Government. 

• Firms should therefore look beyond traditional City-focused engagement and demonstrate how they contribute to investment, innovation, productivity and regional growth across the UK. Businesses able to align their priorities with these wider Government objectives including through expanding or establishing a UK presence will be well placed to engage with ministers, HM Treasury and regulators. 

• There may also be opportunities for businesses to engage the Prime Minister’s newly revived National Economic Council. Attendees to the Council are expected to flex depending on the issues being discussed. The Government has suggested that there will be opportunities for business leaders to attend on an ad hoc basis to share views on the best ways on advancing the Government’s economic policy priorities.