For the Labor chancellor, this was a bold move: Rachel Reeves went to Davos and told an audience of global wealthy people that she wanted to make their lives easier by creating a riskier regulatory environment for UK consumers.

Far from the Swiss Alps, Reeves Vs Organizers Right-wing Conservatives cheered, but some Labor MPs expressed despair that their chancellor’s pursuit of growth was taking the party into dangerous territory.

“People are hanging their heads in disbelief,” a senior Labor MP said.

ReevesHis World Economic Forum speaker was adamant: “You have to find the right balance. I think the balance has gone too far in risk regulation. You have to be able to protect consumers but people have to be able to take risks as well.”

Markus Bukerinck became head of the Competition and Markets Authority on Tuesday Highest level of casualties Because of Reeves’ new approach, he was forced out of his job by ministers due to his alleged tepid appetite for growth-focused reforms.

His dismissal was intended to serve as a warning to other regulators, according to government officials. This month, Reeves asked 17 regulatory bodies to prepare action plans to boost growth and warned them that she would be watching.

John McDonnell, a former Labor shadow chancellor, said Reeves could hand a propaganda victory to Nigel Farage, leader of Britain’s populist Reform Party, if she pursues her agenda aggressively at the expense of consumers.

“I am increasingly concerned that all of this will provide our opponents, particularly the Reform Party, with the opportunity to portray Labor as defending corporate abuses and profiteers,” he said.

Reeves’ efforts to protect businesses from what government departments see as a harmful “culture of compensation” have taken many forms in recent months, with a common theme: providing less money to allegedly aggrieved consumers.

This week, Reeves She sought intervention In a case brought by the High Court to protect banks and other car loan providers from multi-billion pound payments in a mis-selling case, arguing that it would “adversely affect the UK’s reputation as a place to do business”.

Last year, the Treasury Department successfully lobbied regulators to do so cut It has capped proposed compensation for victims of payment fraud from £415,000 to £85,000, amid fears the new regime could seriously harm some fintech companies.

Reeves has also pushed for a review of the Financial Ombudsman Service to prevent further mass consumer redress events, such as the £50bn paid out by banks over the Payment Protection Lock scandal.

The Conservatives find themselves in a strange position, urging Reeves to press ahead with an agenda launched in 2023 under Rishi Sunak, when regulators were given a “secondary aim” to boost economic growth and competitiveness.

Andrew Griffiths, the shadow business secretary, wants to see a wider clearing out of regulators and has been critical of the Financial Conduct Authority, the City’s watchdog. He thought Bokerinac’s dismissal was a “strange place to start”.

“The chancellor is doing absolutely the right thing for the regulators,” said Bim Afolami, a former Tory city minister. “My advice to her is to carry on.” Another former Tory treasurer said simply: “I think she may be right.”

But conservatives also believe Reeves, who presides over a sluggish economy, is using regulators as a scapegoat. Harriet Baldwin, a senior Tory MP, said the Chancellor should “admit some of her mistakes rather than blaming everyone”.

As Sir Keir Starmer’s government sets to introduce a wave of labor regulation, many business leaders agree with Tory criticism that deregulation should start closer to No. 10. Ministers may still be able to do so. Water down That package.

In exchange for a focus on growth, Reeves has given a clear signal that she will stand by regulators when things go wrong — as they inevitably will, regulators say. One of them said: “We feel like she is protecting us now.”

Nikhil Rathi, the FCA’s chief executive, told the House of Lords on Wednesday that proposed rule changes – such as easing controls on mortgage lending – could lead to more defaults. “There are one or two things that will go wrong here,” he said, arguing that Parliament should give the oversight body “a measure of acceptable failure.”

Consumer groups expressed concern. “The combination of anti-regulation rhetoric – and now the sacking of the head of the CMA – signals to consumers that the government is prepared to roll back the protections created for them,” said James Daly, head of research group Fire Finance.

Rocío Concha, director of consumer group Which?, said the government was “absolutely right” to focus on growth and the role of regulators. But she added: “Strong consumer protections are not an impediment to growth. They are vital to economic growth because they help create a level playing field for dynamic competition, while ensuring that consumers are protected from being ripped off.

Professor John Thanassoulis of Warwick Business School, who is also an independent member of the CMA committee, said the government should “Resist the temptation to attack the Capital Markets Authority“.

He added: “This will not lead to productivity growth at the market level. Instead, it will reward a few well-connected companies at the expense of the countless silent majority who want an inexpensive and fair market, and whose companies put the consumer first.

Dame Meg Hellyer, Labour’s chair of the House of Commons Treasury Committee, said that while she supported Reeves’ goal of getting regulators to boost growth, it was “critical that economic stability and consumer protections are not unduly jeopardised”.

At the moment, most Labor MPs are not mobilizing against Reeves. “There’s a bit of a muttering about not going back to 2008,” a senior Labor MP said, referring to the “light” regulatory landscape before the financial crisis. “But it hasn’t reached the party mainstream yet – it is still seen as a bit niche.”