Treasury sides with insurers to free up billions in capital
Jeremy Hunt has overruled the Bank of England on a key part of insurance reforms intended to unlock tens of billions of pounds of investment into the real economy.
In a range of measures in the Autumn Statement intended to boost the UK’s financial sector, the chancellor made a long-awaited decision on revising the so-called Solvency II regime, which governs how insurers are run, including how much capital they must hold and where they can invest.
Speaking to MPs, Hunt invoked the Big Bang, a sweeping financial deregulation in the 1980s under his predecessor Nigel Lawson, saying: “We must stay true to its mission to make the UK the world’s most innovative and competitive global financial centre.”
The reduction to 3 per cent means banks will pay an effective tax rate of 28 per cent — still higher than its current level due to an increase in general corporation tax to 25 per cent from 19 per cent in April 2023
This story originally appeared on: Financial Times - Author:Emma Dunkley
