Tulip Siddiq, the UK government minister responsible for coordinating policy around the country’s financial services sector, has resigned from her position.
Downing Street confirmed the news of her departure yesterday (14 January). Siddiq served as Economic Secretary to the Treasury, a role also known as the ‘City Minister’ due its significance for UK financial services.
Siddiq informed Keir Starmer, UK Prime Minister, of her decision in a letter which has been published on the UK government website. Starmer’s response to Siddiq’s decision has also been published.
The MP for Hampstead and Highgate was appointed City Minister following Labour’s election victory in July last year. However, her tenure has been marred by controversy in recent months relating to her aunt, the former Prime Minister of Bangladesh, Sheikh Hasina.
Hasina was ousted from her position as PM of Bangladesh in August last year after a mass uprising against her government, which faced criticism for human rights abuses, democratic backsliding, authoritarianism and corruption.
Bangladesh’s Anti-Corruption Commission (ACC) subsequently accused Siddiq of involvement in an illegal land grab scheme with her aunt and the UK Anti-Corruption Coalition later issued a call for her to step down, largely due to ‘conflicts of interest’.
‘A distraction from the work of the government’
In both Siddiq and Starmer’s correspondence it has been made clear that Sir Laurie Magnus, Independent Adviser on Ministerial Standards, found that Siddiq had not breached the Ministerial code. It also seems that the MP made Starmer’s government fully aware of her family connections in Bangladesh before taking the position as City Minister.
“My family connections are a matter of public record and whenI became a Minister I provided the full details of my relationships and my private interests to the government,” Siddiq’s letter to Starmer read.
“After extensive consultation with officials. I was advised to state in my declaration of interests that my aunt is the former Prime Minister of Bangladesh and to rescue myself from matters relating to Bangladesh to avoid any perception of a conflict of interest.
“I want to assure you that I have acted and continue to act with full transparency and on the advice of officials on these matters.”
Regardless of any due diligence Siddiq and the government may have carried out regarding her connections to the former Bangladeshi administration, it is not exactly great PR for the Labour leadership.
The fact that Siddiq has been accused of involvement in a corruption scandal while working in a government position with a remit to tackling corruption in British financial services is a particular irony that has been noted extensively in the press.
In her statement, Siddiq acknowledged that “it is clear that continuing in my role as economic secretary to the Treasury is likely to be a distraction from the work of the government”.
As City Minister, Siddiq has overseen the implementation of a number of key Labour policies around financial services, coupled with the introduction of new legislation in these areas.
This included the publication of the National Payments Vision (NPV), the rollout of community banking hubs, introduction of new rules around BNPL, and the granting of fraud prevention powers to banks.
Legislative efforts have seen the Finance Bill, covering tax and investment; the Digital Information and Smart Data Bill, focusing on smart data schemes and ID verification; the Data Use and Access Bill, which has significance for Open Banking; and the Property (Digital Assets etc) Bill, with implications for cryptocurrency.
In his response to Siddiq, PM Starmer thanked her for noting any potential distractions from Labour’s fiscal policy plans, saying: “I appreciate that to end ongoing distraction from delivering our agenda to change Britain, you have made a difficult decision and want to be clear that the door remains open for you going forward.”
On the topic of distractions, the news has taken away from the revelation that UK inflation fell from 2.6% to 2.5% in December. This is still 0.5% above the Bank of England’s ideal rate of 2%, but is welcome news for the government, which like every other administration will likely find itself judged on its economic achievements above all else.
Chancellor of Exchequer Rachel Reeves said: “There is still work to be done to help families across the country with the cost of living. That’s why the government has taken action to protect working people’s payslips from higher taxes, frozen fuel duty and boosted the national minimum wage.
“In our Plan for Change, we were clear that growth is our number one priority to put more money in the pockets of working people. I will fight every day to deliver that growth and improve living standards in every part of the UK.”
