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Factbox - Britain's budget finance sector policies
November 22, 2017 / 4:08 PM / 25 days ago

Factbox - Britain's budget finance sector policies

LONDON (Reuters) - Chancellor Philip Hammond on Wednesday published the country’s autumn budget. Below is an outline of the main policies affecting the finance sector:

RBS SHARE SALE

Britain’s government will reprivatise bailed-out lender Royal Bank of Scotland (RBS.L) by selling 15 billion pounds worth of shares, according to an official report released on Wednesday, in a boost to chancellor Philip Hammond’s coffers.

The government will begin the delayed share sale by selling 3 billion pounds worth of shares in RBS before the end of the 2018-19 fiscal year, the independent Office for Budget Responsibility (OBR) said in the report.

The government will also sell the remaining mortgage assets held by UK Asset Resolution.

INVESTMENT IN INNOVATION

Hammond announced plans to boost investment in “innovative firms” by more than 20 billion pounds over the next 10 years.

The range of measures to help tech and other higher-risk “growth” companies gain scale included establishing a new 2.5 billion pound investment fund to co-invest in companies with the private sector, taking total investment to 7 billion pounds.

Hammond also said he had asked the Pensions Regulator to clarify its guidance on long-term investments, to try and free up more of the country’s 2 trillion pounds in pension funds to be invested in so-called “patient capital” projects.

INFRASTRUCTURE

The budget included a 1.7 billion pound Transforming Cities Fund to improve local transport connections, and 385 million pounds for projects to develop next generation 5G mobile and full-fibre broadband networks.

Included in a range of measures was a planned investment of 337 million pounds in the Tyne & Wear Metro as well as 243 million pounds for development in Greater Manchester.

To support the transition to zero emission vehicles, the government announced plans to invest 200 million pounds in a Charging Investment Infrastructure Fund, to be matched by the same amount of private sector capital.

The government said it planned to update the National Infrastructure and Construction Pipeline in December 2017, setting out a 10-year projection of public and private investment in infrastructure of around 600 billion pounds.

OPEN BANKING

Britain’s nine biggest banks are getting ready for open banking, which would involve sharing customers’ data with third parties that can then use it to build or recommend better suited products.

    Hammond said the government had now secured the commitment of the largest banks to extend Open Banking to more payment products, including credit cards. The second phase of the Nesta Open-Up Challenge will also award 2.5 million pounds to firms to develop innovative Open Banking apps to support greater customer choice and flexibility.

    CHALLENGER BANKS

    Hammond announced the Prudential Regulation Authority (PRA) would make capital requirements more proportionate for eligible smaller banks, helping them compete more effectively in the market.

    The government will ask Post Office Limited and UKFinance to raise public awareness of the banking services available at the Post Office, both for personal customers and Small and Medium Enterprises (SMEs).

    To improve access to reputable sources of credit, the government will increase the number of potential members that a credit union serving a local area is able to have from 2 to 3 million.

    COMPETITION REGULATOR

    The Competition and Markets Authority will get an extra 2.8 million pounds a year so it can take on more cases. The government will also allow the CMA to use more of the fines it collects to pay the legal costs of defending its decisions.

    ASSET MANAGEMENT

    The government said it would publish a new long-term strategy for the asset management sector, including around skills, financial technology, innovative investment strategies and international engagement.

    Reporting by Lawrence White, Simon Jessop and Anjuli Davies; Editing by Mark Potter

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