Welcome to The Fiscal Dispatch, Atticus Partners’ financial services newsletter. Once a month, we cover topical stories relating to financial services (FS) in Westminster and Whitehall.
In this edition, we look at proposals to solve the increasing burden of student debt, plans for a British payments network, Reform’s appointment of a ‘Shadow Chancellor’ and more.
The Liberal Democrat plan to tackle student debt
The Liberal Democrats have recently published proposals to reform the student finance system, arguing that successive governments have made it more punitive and unpredictable. The party criticised the freezing of repayment thresholds, changes to interest rules and the extension of repayment periods, contending that graduates are paying more for longer while facing wider cost-of-living pressures.
Central to the plan is reversing the current freeze on repayment thresholds so that they rise in line with average earnings. The Liberal Democrats state that this would reduce monthly repayments for many graduates, with lower earners potentially saving thousands of pounds over the lifetime of their loans. They also propose establishing an independent watchdog to oversee student loan terms, in an effort to prevent governments from repeatedly altering repayment conditions.
Beyond repayment reform, the party calls for partial loan write-offs for nurses, doctors, teachers, police officers and armed forces personnel after ten years of public service, alongside the restoration of £3,500 annual maintenance grants for disadvantaged students. It further advocates the creation of a Royal Commission to build cross-party consensus on longer-term reform.
Taken together, the proposals reflect a broader attempt to balance fiscal constraints with fairness and stability, positioning student finance reform as both a cost-of-living intervention and a structural reset of the current system.
Financial experts unite in criticism of regulation
In February, the think-tank the Institute for Fiscal Studies (IFS) published a report criticising the UK’s existing fiscal rulebook, describing it as “dysfunctional” and questioning the value of the current rigid targets for borrowing and debt. The IFS instead proposed a “traffic light” system that would rate a range of economic indicators - assessed by the Office for Budget Responsibility - as red, amber or green, thereby moving away from reliance on a single fiscal measure.
The IFS argues that this approach would provide a broader and more transparent picture of the public finances, while encouraging more thoughtful and sustainable policymaking.
In a similar vein, Nikhil Rathi, Chief Executive of the Financial Conduct Authority, argued last month for a less prescriptive approach to financial regulation. He outlined how the UK’s departure from the European Union offers greater flexibility to determine which rules should be retained, removed or adjusted to better serve domestic markets.
Taken together, these interventions suggest that across the UK’s financial architecture - from national fiscal policy to the regulation of financial markets - there is growing concern that overly detailed rule sets can create distortions and unnecessary complexity. In contrast, broader frameworks focused on outcomes and principles may be better placed to deliver meaningful and sustainable results.
British Financial Sovereignty
Major British lenders are currently exploring the development of a homegrown payments network designed to challenge the long-standing dominance of American giants Visa and Mastercard. This ambitious initiative involves several of the largest retail banks in the United Kingdom who are concerned about rising transaction fees and a lack of domestic sovereignty over financial infrastructure. By creating an independent system, these institutions aim to reduce the costs associated with processing payments while providing more direct control over how money moves within the British economy.
The project is partly motivated by a desire to insulate the domestic market from international geopolitical shifts and changes in trade policy that could affect global payment rails. Recent discussions suggest that a dedicated British platform would utilise account-to-account technology, allowing funds to be transferred instantly between buyer and seller without relying on the traditional card-based pipelines. This approach could significantly lower overheads for small businesses and retailers who have grown increasingly frustrated with the current fee structures imposed by the two primary service providers.
Furthermore, there is a strategic interest in ensuring that the United Kingdom remains a leader in financial innovation following its exit from the European Union. While previous attempts to launch similar schemes have struggled to gain traction, the current level of collaboration between major high street names indicates a more serious commitment to reform. Industry experts believe that a successful rollout would not only enhance competition but also offer consumers a more diverse range of payment options. Although the technical and regulatory hurdles are substantial, the drive for a sovereign alternative reflects a broader trend toward digitising the financial landscape and protecting national economic interests against external price hikes and service disruptions.
A new Chief Economic Adviser
On the 13th of February, Professor Brian Bell was appointed as the new Chief Economic Adviser to HM Treasury and Head of the Government Economic Service, succeeding Sam Beckett and stepping into one of the UK’s most influential economic policy roles from the 9th March 2026. Professor Bell will serve as the principal macroeconomic and fiscal adviser to both the Chancellor Rachel Reeves and to the Prime Minister Sir Keir Starmer, overseeing economic analysis and policy prescription at the heart of Whitehall.
Bell joins the Treasury from his roles as Chair of the Migration Advisory Committee and Professor of Economics at King’s Business School (King’s College London), bringing a mix of academic, central-bank and private-sector experience, including previous economist posts at the Bank of England and International Monetary Fund as well as work in London’s financial sector.
The appointment arrives at a critical juncture for UK fiscal strategy. HM Treasury recently secured multiple interest-rate cuts, and inflation is falling faster than previously forecast. The Chancellor has framed Bell’s hiring as strengthening economic leadership to support growth, cost-of-living reduction and improved economic security for households and businesses.
Bell’s academic background, including commentary on labour markets and skills shortages, suggests a potential government focus on the structural dynamics underpinning productivity and wage growth, areas with implications for fiscal policy forecasts, public spending priorities and long-term competitiveness.
For financial markets, this appointment signals continuity in economic stewardship but also the potential for deeper analytical rigour in planning as the Treasury navigates growth, investment and public finances in a challenging macroeconomic environment.
The Shadow Shadow Chancellor
Reform UK has taken the latest step in attempting to position itself as a government-in-waiting by announcing a ‘Shadow Cabinet’ with Robert Jenrick as ‘Shadow Chancellor’. Despite the announcement signalling that Reform wants to be taken seriously on economic policy, the question is whether Reform has any credible fiscal policies in the works.
Jenrick, a former Conservative minister under four prime ministers, framed his mission starkly, declaring that Britain’s economy “isn’t working” and Labour’s economic track record is “tantamount to vandalism”. While the Party’s detailed policy is yet to be revealed, the broad direction is clear and likely to be a reversal of the governments Jenrick served in.
Reform is expected to push for tighter control of public spending, tax simplification, and a more openly pro-growth agenda centred on deregulation. The party also wants to lower energy costs and a harder line on welfare and immigration that would in turn reduce public spending. In short, Jenrick is likely to argue that growth comes from discipline, incentives, and national competitiveness rather than state expansion.
Despite having just eight MPs, Reform is polling around 28 per cent, ahead of both Labour and the Conservatives. That reflects a volatile electorate, frustrated with high taxes, weak growth, and stagnant living standards.
Jenrick’s new position is an early warning for the government. Even from outside official opposition, Reform can shape the economic debate, hold the government to account on fiscal credibility, and further fragment the right. If Jenrick helps Reform to deliver a more coherent economic programme, the party may be able to siphon more votes from both sides of the political divide.
For more information about Atticus’ work in FS, or queries about the support you require, please get in touch via FS@atticuscomms.com