In a bold move for a Labor chancellor: Rachel Reeves heads to Davos to tell a global audience of tycoons she wants to help create a riskier regulatory environment for British consumers to make their lives easier.

Away from the Swiss Alps, Reeves's offensive against regulators has been cheered by the right-wing Conservatives, but some Labor MPs despair that the chancellor's pursuit of growth is driving the party into danger.

"People are in disbelief," said one senior Labor MP.

Speaking at the World Economic Forum, Reeves was firm: "You have to get the balance right. I think the balance in terms of risk regulation has gone too far. You have to be able to protect consumers, but people should also be able to take risks ”

On Tuesday, Competition and Markets Authority chairman Marcus Bokkerink became the highest-profile casualty of Reeves' new policies, with ministers pressuring him over his lack of interest in growth-focused reforms Step down.

Administration officials said his firing was intended to send a warning to other regulators. This month, Reeves asked 17 regulators to develop action plans to boost economic growth, warning them she would be watching closely.

John McDonnell, the former Labor shadow chancellor, said Reeves could hand the propaganda victory to Nigel Farage, the leader of the populist UK Reform Party, if he aggressively pursues his agenda at the expense of consumers. Jere Farage.

"I am increasingly concerned that this will all provide an opportunity for our opponents, particularly reformists, to portray Labor as defending corporate abuse and profiteers," he said.

In recent months, Reeves has taken various forms to protect businesses from what the government considers a damaging "pay culture," with a common theme: reducing the incomes of consumers they say have been wronged.

This week, Reeves sought to intervene in a Supreme Court case to protect banks and other car loan providers from multi-billion-pound damages in a landmark mis-selling case, which he argued would "have an impact on the UK as a country doing business" adversely affect the reputation of the place."

Last year, the Treasury successfully pressured the regulator to cut the proposed limit on compensation paid to fraud victims from £415,000 to £85,000 amid concerns that the new regime could seriously harm some fintech companies.

Reeves also pushed for a review of the Financial Ombudsman Service to prevent more large-scale consumer compensation incidents, such as the £50 billion bank payout over the payment protection insurance scandal.

The Conservatives find themselves in the odd position of egging Reeves on to further the agenda started by Rishi Sunak in 2023, when the regulator's "secondary objective" was to promote economic growth and competitiveness.

Shadow business secretary Andrew Griffith wants to see a wider clean-up of regulators and has been critical of the financial markets regulator, the Financial Conduct Authority. He considered firing Bocklinck "a strange starting point."

Bim Afolami, the former Conservative city minister, said: "The chancellor has done absolutely the right thing with the regulator. My advice to her is to move on." Another former Conservative finance minister simply Said: "I think she might be right."

But the Conservatives also believe Reeves is using regulators as scapegoats for a stagnant economy. Senior Tory Harriet Baldwin said the chancellor should "admit some of his own mistakes rather than blaming others".

With Sir Keir Starmer's government introducing a wave of employment regulations, many business leaders agree with Tory criticism that deregulation should begin closer to No. 10. Ministers may also play down the plan.

Regulators say that in return for focusing on growth, Reeves has sent a clear signal that she will stand with regulators when problems arise - which they inevitably will. "We feel like she has our back now," one person said.

FCA chief executive Nikhil Rathi told the House of Lords on Wednesday that proposed rule changes - such as loosening controls on mortgages - could lead to more defaults. "One or two things will emerge here," he said, arguing that Parliament should give regulators a "measure of tolerable failure".

Consumer groups expressed alarm. James Daley, head of Fairer Finance's research group, said: "Anti-regulatory rhetoric coupled with now the sacking of the CMA chairman sends a signal to consumers that the government is ready to remove the protections established for them."

Rocio 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 will not be a barrier to growth. They are vital to economic growth because they help level the playing field for dynamic competition while ensuring consumers are protected from deception."

John Thanassoulis, a professor at Warwick Business School and a member of the CMA's independent panel, said the government should "resist the temptation to attack the CMA".

He added: “This will not drive productivity growth across the market. Instead, it will reward a few well-connected companies to the detriment of the countless but silent majority who want an affordable, fair market and who companies put consumers first.”

Dame Meg Hillier, the Labor chair of the House of Commons treasury committee, said that while she supported Reeves' aim to push the regulator to boost growth, it was vital "economic stability and consumer protection are not unduly threatened".

For now, most Labor MPs have not mobilized against Reeves. "There are some people complaining that it's not going to be back to 2008," one Labor figure said, referring to the "loose" regulatory environment before the financial crisis. "But it hasn't become mainstream in the party yet - it's still seen as a bit niche."