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Britain's Labour Party reviews financial services to 'unleash' City for growth

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By Huw Jones

LONDON, Dec 8 (Reuters) -Britain's opposition Labour Party on Friday launched a review to "unleash" the financial sector to boost growth, as it readies for an election expected next year which polls predict it will win.

Labour's financial services spokesperson Tulip Siddiq said finance is one of Britain's "greatest assets", and that the party is determined to "do what it takes to unleash" its full potential, and "reinforce" the City's role as a global financial centre.

"The message I have heard from the City time and time again is the need for the next government to provide long-term stability and a clear sense of direction on policy priorities," she said in a statement.

It marks the latest moves by Labour, seen as being hostile to business in the past, to reassure the City that it will not take a hard line against bankers if elected to power.

Saddled with a cash-strapped Britain, Labour, like the current government, is having to rely heavily on private money and pensions to help fund infrastructure, company growth and clean technology.

Britain has already undertaken a root-and-branch review of financial rules following Brexit, with more than 30 public consultations on reforms to listing rules, insurers' capital requirements and other changes under the "Edinburgh Reforms" banner.

A new financial services law was approved earlier this year to introduce the reforms, but lawmakers on Friday said too few changes have been implemented, and those that have made little difference.

The City worries about its global competitiveness as UK companies, such as commodities broker Marex on Friday, and chip designer Arm in September, opt to list in New York instead of London.

The City also faces added competition from EU financial centres such as Frankfurt, Paris and Amsterdam since Brexit.

Labour leader Keir Starmer, Siddiq and other party officials were meeting with representatives from the financial sector in Edinburgh on Friday, a year since the "Edinburgh Reforms" were outlined by finance minister Jeremy Hunt.

The Labour review comprises an advisory panel, whose members include London Stock Exchange Group LSEG.L CEO David Schwimmer, Schroders SDR.L Chair Elizabeth Corley, Barclays Group BARC.L Chair Nigel Higgins, Bank of England director Ron Kalifa, Legal & General Group LGEN.L Chair John Kingman, and Shriti Vadera, Chair of insurer Prudential PRU.L.

The review, with support from consultants Oliver Wyman, will consider five key areas: capital markets, competitiveness, consumer protection, innovation and sustainability.

The panel's final report will be launched in early 2024 to help shape Labour's election manifesto.

Reporting by Huw Jones, Editing by Louise Heavens


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