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Labour’s General Election Manifesto: What Fintechs Say About It

The Labour Party unveiled its 2024 election manifesto this week, setting out what the party’s plans would be, should it win the election on 4 July. 

Keir Starmer launched Labour’s manifesto, promising to boost economic growth and create “a new Britain, where wealth is created in every community”.

It has pledged to ensure a “pro-business environment, with a competition and regulatory framework, that supports innovation, investment and high-quality jobs”.

Labour says it will also create the conditions to support innovation and growth in the financial services sector, through “supporting new technology, including open banking and open finance and ensuring a pro-innovation regulatory framework”.

To drive innovation, Labour says it will create a new Regulatory Innovation Office, 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 will ensure the safe development and use of AI models by introducing binding regulation on the handful of companies developing the most powerful AI models and by banning the creation of sexually explicit deepfakes.”

Labour has also outlined plans to work with “allies and international financial centres” to tackle corruption and money laundering.

Here’s what fintechs had to say about the manifesto.

FundOnion

AI-driven business finance comparison site FundOnion highlights the lack of focus on small businesses in the manifesto.

“There were no rabbits in Labour’s manifesto and only five mentions of small business in the entire 136-page document,” says James Robson, CEO of FundOnion. “This is despite over 13 million Brits being employed by a small business and small businesses making up 99 per cent of UK companies.

“To truly grow the economy, as Labour says is their focus, a Labour government would need to prioritise small business growth and funding. The commitment to cap Corporation Tax at 25 per cent for the entire parliament as well as retain a permanent full expensing system for capital investment and the annual allowance for small business, are not going to set the world alight for those SMEs currently struggling.

It will be interesting to see the detail in Labour’s plans to reform the British Business Bank. If the party is serious about a growing economy and making access to capital easier, what we really need to see is innovative and creative solutions to reverse the long trend of the falling availability of growth finance alongside greater access to alternative finance options.”

Satago

Satago, a fintech providing working capital solutions, also suggests that major political parties need to better address how they will be supporting SMEs.

Sinead McHale, CEO, Satago, said: “Small and medium-sized enterprises are the heart of the UK economy, contributing significantly to employment, innovation, and economic growth. Their concerns and needs must be urgently prioritised in the manifestos of all major political parties ahead of the upcoming general election.

“SMEs face unique challenges during uncertain economic climates. Despite the UK no longer being in a recession and easing inflation, business costs remain high. With limited access to finance and late payments persisting from larger corporations, SMEs continue to grapple with profitability, sustainability and growth.

“To ensure their continued success, SMEs need political parties to propose measures to improve payment terms and cash flow, such as enforcing stricter penalties for late payments from larger companies and incentivising prompt payment practices.

“Additionally, increased support for sustainable cashflow management practices such as invoice financing not only aligns with market trends but also enhances resilience for SMEs against future challenges. By prioritising the needs of SMEs, political parties can demonstrate their commitment to fostering a business environment that benefits the UK.”

SMEB

SMEB, a financial technology company dedicated to supporting small businesses, addresses Labour’s pledge to support new technology and ensuring a pro-innovation regulatory framework.

Andrew Martin, CEO and founder of SMEB, said: “One of the biggest hurdles to the widespread adoption of open finance in the UK is that nobody knows about it. We need a new approach that educates consumers and businesses on its benefits.

“As well as educating the market, we need to expand the functionality to include all bank activity, rather than limiting it to data sharing. Finally, we need industry champions to drive the project and raise the awareness it needs to be a success.”

RipJar

On Labour’s plans to tackle financial crime, Gabriel Hopkins at Ripjar, a company formed by ex GCHQ technologists which is helping financial institutions identify criminals, suggests the industry should welcome international alignment on methods to tackle financial crime. Especially as criminals are becoming more sophisticated in money laundering, financing terrorism, and other crimes.

“International alignment on methods to tackle financial crime should of course be welcomed by the industry,” said Hopkins. “Criminals are becoming smarter and increasingly bold in their money laundering approaches, helping to finance terrorism and commit other crimes. Action must be taken to ensure we have a joined-up approach to combat the rise in these activities.

“The current UK government focus on financial crime aligns with the enhanced controls and measures to tackle money laundering that we’re seeing in the EU. At the same time, the US is toughening up its approach, as seen with the substantial corporate fine for Binance and the individual liability established for its CEO and his subsequent prosecution.

“If we’re going to succeed with this joined up approach, enhanced, good quality customer screening will be key. That means turning to new technologies such as artificial intelligence which strengthen compliance team’s capabilities in being able to carry out KYC checks and better analyse and check potentially rogue customers at scale.”

Clearpay

On Labour’s plans to ensure a pro-innovation regulatory framework, a spokesperson for Clearpay, the buy now, pay later (BNPL) provider, commented: “The scale of innovation in UK fintech has long been one of its greatest strengths, and the industry’s rapid growth is testament to this.

“Millions of UK consumers and businesses use fintechs every day to manage their money. The continued success of UK fintech will be dependent on the Government and regulators working together to support the industry’s growth – and deliver a regulatory landscape that can keep pace with innovation.”

 

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