Kwasi Kwarteng is planning on getting rid of the European Union’s cap on banker bonuses, as well as other legislation, which may allow the new Prime Minister Liz Truss to achieve her goal of getting rid of all Brussels-derived rules by the end of 2023. Source: Kwasi Kwarteng to scrap EU rules to boost economy as insurers eye up £95bn Brexit bonanza
FULL STORY – Kwasi Kwarteng plans to remove the EU’s restrictions on banker bonuses and other regulations, which may help Prime Minister Liz Truss achieve her objective of eliminating all Brussels-derived rules by 2023.
Next Friday, the newly appointed Chancellor will announce getting rid of the EU’s rules on banker bonuses, which are presently limited to twice their wages. Mr Kwarteng will also announce a £30 billion tax reduction to assist with the cost of living crisis and boost economic development, which the new government wants to achieve at 2.5% annually.
Mr Kwarteng is expected to propose changes to Solvency II, an EU law that standardises insurance regulation across the EU.
The Bank of England’s Prudential Regulation Authority must approve the replacement of Solvency II because it fears reducing policyholder safeguards. Insurers say Solvency II has hindered their capacity to invest £95 billion in long-term projects like windfarms and social housing.
Boris Johnson’s government tabled the Financial Services and Markets Bill to repeal “EU-derived legislation” earlier this year. This might be a start to a solution for Solvency II, although it may take years to pass.
The next Chancellor’s mini-budget statement is also anticipated to address the cost of living crisis. The last time the pound sank that much was following the Brexit vote in October 2016.
Concerns have been expressed about how the incoming Government would pay support packages while still lowering taxes. The Bank of England predicts a UK recession by the end of 2022. Bank of England Governor Andrew Bailey met with Kwarteng on Saturday to discuss a “energy markets financing scheme.”
Last week, the government unveiled a plan to loan energy providers money to keep up with growing rates. This proposal aims to lower energy firms’ expenses while purchasing gas and power during the Ukraine conflict.
Financially healthy enterprises may engage in the plan as a last option to acquire energy if world prices continue to increase.
The Government will also explain how the Prime Minister’s proposal to freeze household energy costs at £2,500 would function.
Gerard Lyons, an economist, said that the steps being taken now are “meant to stop the deep recession that seemed inevitable a few months ago.”
Liam Conway from Control Energy Costs said his consumers are “in limbo” while they await specifics on the new budget plan.
In advance of Mr Kwarteng’s mini-budget plan this coming Friday, the Office for Budget Responsibility will disclose the cost of the Government’s plans this coming autumn.