The UK’s Business Secretary has said she is worried about there being too many rules in financial services, and she warned that cultural issues should not get in the way of growth.
Kemi Badenoch, speaking at TheCityUK international conference, said her job often involves “the killing of bad ideas”.
This included writing to UK financial regulators to warn against proposed mandatory ethnicity quotas, which she said the law “does not require and could be counterproductive”.
“These so-called cultural issues have an impact more significant than we realise on the bigger picture,” Ms Badenoch told the audience.
Black, Asian or other ethnic minority staff hold one in 10 management roles in UK financial institutions, according to a letter sent by major UK investors to the Financial Conduct Authority (FCA) in December.
They were urging the FCA to introduce mandatory ethnicity pay gap reporting, which they said was a step towards encouraging more action to create more equitable workplaces.
The FCA is currently consulting on proposals to boost diversity and inclusion in UK financial services.
Ms Badenoch said she has spoken against mandatory ethnicity pay reporting “on dozens of occasions”, adding: “People want us to bring these things in, I say no.”
Meanwhile, Ms Badenoch referenced her own background in banking and consulting, having worked as a systems analyst at Royal Bank of Scotland prior to her career in politics.
“When I say the burden of regulation has become too high under successive governments, I speak not from theory, but from personal experience,” she said.
The Conservative MP said that was where her “intense dislike of burdensome, arcane and quite often needless regulation was born”.
Ms Badenoch said: “I worry about the tendency to push for well-meaning but counterproductive measures that stifle growth, productivity and innovation.”
She added: “Regulation has moved from protection against fraud and systemic failure to everything from diversity to green finance, and this ever-rising tide of micro management will not necessarily make us or the financial markets stronger.”
