Draft Markets in Financial Instruments (Miscellaneous Amendments) Regulations 2025 Draft Financial Services and Markets Act 2023 (Capital Buffers and Macro-prudential Measures) (Consequential Amendments) Regulations 2025

Debate between James Murray and Mark Garnier

Monday 8th September 2025 General Committees

[Mark Garnier (Wyre Forest) (Con)]

It is a great pleasure to speak in this incredibly dry debate about incredibly technical aspects of regulation. I am only disappointed not to see the new Economic Secretary to the Treasury make her debut today, although it is always nice to see the Chief Secretary.

[James Murray]

It’s too much excitement for day one.

[Mark Garnier]

Quite right. The hon. Gentleman’s leader is with the parliamentary Labour party right now, I think, which will be very exciting.

The regulations are technical, dry but welcome changes to the detailed firm-facing regulations and definitions in the MiFID organisational regulations and capital buffers regime. They follow the comprehensive changes to regulation and tax that the last Government introduced through the Edinburgh reforms, while helping to implement the announcements the Chancellor set out in her 2024 Mansion House speech.

We on the Conservative Benches will always support reforms that aim to make the UK financial market more competitive and growth-oriented. Our financial services are our biggest export and it is vital that we do everything we can to ensure we keep them competitive with their counterparts in Europe and the rest of the world, while at the same time ensuring the UK is a principal destination for international capital. Let me be clear that we support the considered approach being presented, which will allow us to embrace the regulatory autonomy that Brexit provides while keeping us relatively aligned to EU frameworks such as MiFID. That is important because although we need to innovate to maintain our competitive advantage, we must equally avoid trying to reinvent the wheel on financial services regulation.

I push the Minister to look at the wider regulatory burden that MiFID II has placed on UK financial firms. Many in the sector think the reporting obligations, investor protection rules and governance standards have imposed significant compliance costs and operational complexity. Although the intention is noble, we can over-regulate and we must remember that risk will always be something that we cannot remove completely. That was highlighted in a submission by UK Finance to a recent House of Lords Committee inquiry that showed that the rules have constrained the City’s ability to innovate and grow capital markets.

Although we welcome the regulations, the Government now have the freedom to go further and simplify the onerous rules MiFID II introduced. Doing so would unlock growth in our financial services sector and help us to regain ground lost to competing hubs such as New York and to emerging financial centres in the EU. Nevertheless, we have to accept that the EU is our largest trading partner, so it is right that the changes do not significantly deviate from what was in place before. As I said, the UK deviating to a new regulatory regime would not necessarily help our cause.

We also welcome the fact that the changes will help to make the UK more responsive to emerging trends and risks. That is crucial as we seek to be competitive in an ever more volatile world and it would be remiss of me not to mention that many stakeholders feel the regulatory burden placed on them by the FCA and PRA is already too high and, in some instances, unnecessary. Although the changes should not increase that burden significantly, I hope the Minister and Treasury officials will be mindful of that when making changes in the future.

All together, we broadly welcome the technical changes that the regulations introduce as they will help to streamline capital market regulation and ensure legal coherence. I was going to ask some questions, but I think in the interests of time we can probably pass on that—we do not want to keep anybody waiting. I will leave it at that.

Oral Answers to Questions

Debate between James Murray and Mark Garnier

Tuesday 1st July 2025 Commons Chamber

[Mark Garnier (Wyre Forest) (Con)]

In her Budget last year, the Chancellor tucked away about £10 billion over the next couple of years from reform to the non-dom tax regime. It is important to remember that the OBR said in its fiscal outlook that that figure was “highly uncertain”, and a high-level survey by Oxford Economics found that fully two thirds of non-doms are considering leaving the country in the next couple years as a direct result of those policies. That implies not an increase of £10 billion but a decrease of £8 billion. The Chancellor has created a fiscal black hole of £18 billion with just one policy alone. In this week of heroic U-turns from the Government Front Bench, will the Minister confirm whether they will be axing this tax? When will it finally be condemned to the history books?

[James Murray]

I am not really sure whether there was a policy suggestion in that comment or not. As the shadow Minister will know, the fiscal black hole that we had to address when we won the general election was the £22 billion black hole that the Conservatives left after their mismanagement of the economy. As I said, the Office for Budget Responsibility has confirmed that our reforms to the non-dom regime, with our removal of non-dom tax status, will raise £33.8 billion over the five years of the forecast. It is the OBR’s figures that we will trust in that regard.