Rigby was a popular City minister for almost a year before being promoted a couple of months ago under Keir Starmer’s government. Her return to the role has been particularly welcomed by the financial services industry, with hopes she will see through reforms put forward under Reeves, including controversial changes to the financial ombudsman.
Rigby comes back with a pay bump, as her role as economic secretary to the Treasury now falls under the higher bracket as a minister of state under Burnham’s government, a roughly £10,000 difference from its previous classification as a parliamentary secretary.
That pay rise sends a strong signal to the industry: the City minister will have almost complete control over financial services policy. That will mean continuity on the nitty gritty regulation side of things — a relief for the sector — but it may also free up new chancellor Healey up to focus on the fiscal side of things.
“The chancellor has big issues to consider over this parliament which may mean he spends less time on financial services reforms and policy than his predecessor,” Conway said. “If that’s true, Lucy Rigby may have more autonomy in her role as City minister.”
The main fear for finance executives is that the government could hike the bank surcharge, a specific tax on banks’ profits. The Trades Union Congress, which has been pushing for a windfall tax and has been in close contact with Burnham’s team on the issue, estimates a 16 percent surcharge would raise £24 billion over four years, while a 35 percent surcharge would raise £60 billion. It currently stands at 3 percent.
Those colossal sums would be more than welcome for the chancellor and his team will need to find mounds of cash to fill giant holes in public finances, as the new prime minister has ambitious goals to make a dent in the U.K.’s cost-of-living crisis.