Banking on Change: The New City Minister

The fallout from Angela Rayner’s sudden exit from government continued to play out into this week, with a far-reaching reshuffle of the Prime Minister’s ministerial team. Number 10 was quick to dispel any rumours that he would replace Rachel Reeves as Chancellor; doing so would be a clear admission of fault in his government from which he would find it hard to recover. We do, however, have a new City Minister in place.  

Rising star Lucy Rigby has been elevated to this position,taking on one of the most crucial roles to delivery of the government’s growth agenda. The finance sector will be comforted by the fact that she understands the City, having worked at ‘magic circle’ law firm Slaughter & May before working at the Office of Fair Trading and Which?. However, Rigby’s predecessor,Emma Reynolds, is already onto her third ministerial job in just over a year and only spent eight months in the role, indicative of the wider policy continuity challenge presented by this reshuffle. Given the City’s importance to UK plc, it is vital that Rigby is given a longer run.

Rigby is stepping into the job at a time when the policy framework for the financial services sector has just been set, with the publication of the Financial Services Growth and Competitiveness Strategy and the Chancellor’s 2025 Mansion House package of reforms. That will make it trickier for her than some of the other new appointees to make her mark. Yet, there is an opportunity for her to build on that progress and oversee a coherent plan for growth. As part of that work, she will no doubt look at regulatory performance, the role of fintech in driving growth, and supporting investment as obvious focus areas. The government has also signalled plans for an AI Bill in next year’s King’s Speech, which would require input from the City Minister.

Other immediate priorities in Rigby’s in-tray will include finalising changes to listings rules to make London more attractive for IPOs, baking in risk to the regulatory approach and implementing early parts of the ‘Leeds Reforms’, such as the public campaign to highlight investment opportunities to consumers and simplifying mortgage lending. Rigby wasted no time on the latter,with an industry roundtable on day two in the role alongside the Housing Minister to discuss first-time buyer mortgages.

This all comes at a time when HM Treasury has its sights set on the forthcoming Autumn Budget, presenting the next critical test for Starmer’s government. There is no room for error. Acutely aware of that reality,the Prime Minister yesterday announced the creation of a new ‘Budget board’ –chaired by the new Number 10 Economic Adviser Baroness Minouche Shafik and Pensions Minister Torsten Bell – in an attempt to tighten his grip on economic policy and avoid the contradictions inherent in the Autumn Budget 2024 that did significant damage to business confidence. Senior Ministers and advisers at Number 10 and HM Treasury will be central to government efforts to control the narrative around the Budget and test potential measures with the business community. Meanwhile, Rigby will have an important role in taking soundings from, and selling the Budget to, the City.

This revamped Treasury team must tread a fine line – drawn by the Chancellor’s fiscal rules – between raising revenue and avoiding taxes that discourage the consumer spending and business investment needed for growth. Fail,and the Prime Minister’s already intractable economic and political problems will deepen.

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