Kemi Badenoch, the UK’s Business Secretary, has spoken out about the need to reduce the number of rules in the financial services industry and emphasize cultural issues that do not impede growth. She expressed her concerns during a speech at TheCityUK international conference, where she also discussed her role as a vetoer of what she considers to be bad ideas.
In her speech, Badenoch raised concerns about proposed mandatory ethnicity quotas in UK financial institutions, which she believes are not required by law and could be counterproductive. According to a letter from major UK investors to the Financial Conduct Authority (FCA), only one in ten management roles in UK financial institutions is held by Black, Asian, or other ethnic minority staff. The investors urged the FCA to introduce mandatory ethnicity pay gap reporting to promote more equitable workplaces. However, Badenoch has adamantly opposed mandatory ethnicity pay reporting on numerous occasions, citing concerns about its effectiveness in driving meaningful change.
As someone with experience in banking and consulting, Badenoch argued that regulation in the financial sector has become overly burdensome over the years. She highlighted her preference for regulations that protect against fraud and systemic failure rather than regulations that emphasis diversity and green finance. Concerned about the growing trend towards excessive micromanagement, she warned that this could hinder growth, productivity, and innovation rather than strengthen financial markets as intended.
