Keynote speech: TheCityUK National Conference 2024
The Economic Secretary delivered the keynote speech at TheCityUK’s National Conference, setting out the government’s plans to place the financial services sector at the heart of the growth mission.
Thank you Miles, for that introduction, and for everything you do for financial services in the UK.
And amid all the fantastic work The City UK does – representing not only your members but the whole sector – some of your most important is in your regions and nations agenda.
Led by your amazing network of chairs, representing every corner of the UK, you prove what we all know to be true:
That our financial services industry is a huge, nationwide powerhouse…
… employing more than half a million people outside London…
… and driving our prosperity, both today and into the future.
So it’s a pleasure to be with you this morning at a conference that reflects that contribution.
And it’s appropriate that we are here in Birmingham…
One of this country’s great cities, with a formidable commercial history – and a proud and growing record in financial services.
It was a real honour to be appointed to my current role in July as part of a government with a clear central mission:
To deliver growth across the country.
Today, I want to talk about the steps we have already taken…
…and to set out our priorities for the years ahead…
… and how I see us working together towards that central mission of economic growth.
Because let’s not be in any doubt: this is a crucial moment for our sector.
Financial services will sit at the heart of the government’s plan to deliver growth across the UK…
… as one of our most successful sectors in its own right, and as a key enabler of growth.
But we need to be realistic about where we are starting from.
Unlike some of our international competitors…
… the financial services sector in this country has not grown in real terms since 2008.
Now, it was right that changes were made in the aftermath of the crisis…
… but the Chancellor has spoken of her concern that this has had unintended consequences …
… that the system it created has sometimes gone too far, and risked eliminating risk-taking altogether.
And that while we have been regulating for risk, we have not always been regulating for growth.
I want to be clear that updating that approach should not mean putting our economic and financial stability at risk.
The Budget in October was all about our commitment to building economic stability for the long term.
But this is the moment when we could and should take decisive action to start to redress the balance…
… and take the steps needed to drive growth, competitiveness and investment across the country.
We started putting this into practice at Mansion House…
… where the Chancellor laid out our plan to deliver secure and sustainable growth on a platform of stability, investment and reform.
To drive investment and boost savers’ returns…
… we announced consultations on proposals to deliver major consolidation of the defined contribution market and the Local Government Pension Scheme.
Meanwhile, we have now completed the final steps to reform Solvency II…
… and committed the Treasury, PRA and National Wealth Fund to work together to crowd in insurers.
Both will strengthen insurers’ ability to make productive investments in a wider range of assets…
… supporting the growth of both the UK economy and the insurance sector itself.
New remit letters were sent to the FCA, PRA, PSR and FPC…
… reflecting our view that there is an opportunity for more responsible risk taking across the economy.
And we have made clear to regulators that they should be working to support our ambitions for inclusive and sustainable growth…
… while continuing to protect financial stability.
We want to see proportionate, effective regulation.
The sort that encourages businesses in the UK to start-up, scale-up and innovate…
… and which in turn boosts trade, and attracts inward investment to the UK…
… driving economic growth.
To that end, we are consulting on abolishing the current Certification Regime…
… and replacing it with a more proportionate approach that will reduce costs for businesses.
We’re also reinvigorating our capital markets, engines of growth for businesses up and down the country…
… through initiatives like PISCES, the new regulated market for private company shares, which we have committed to legislate for by May 2025.
Alongside our listing reforms, which will make it quicker and easier for companies to raise capital…
… PISCES will make private secondary markets more transparent and efficient…
… serving the companies around the UK who want to scale and grow.
In doing so, I hope it will boost our pipeline for future IPOs in the UK.
We announced our intention to launch a pilot Digital Gilt Instrument issuance – or DIGIT – using distributed ledger technology…
… something I know The City UK has welcomed.
And we committed to supporting mutuals and co-operatives…
…in a way that can help the sector to grow and play its part in driving innovation and economic growth across the country.
We’ve responded to the findings of Joe Garner’s Future of Payments review by publishing our National Payments Vision …
… setting out our ambitions for a crucial sector, and improving both regulatory coordination innovation…
… using next generation technology to provide greater choice for UK consumers and businesses.
And speaking of that next generation…
…we are championing Fintech as a central part of the government’s growth mission…
… opening the door for new products and services with huge potential.
A key step is laying the foundations for a long-term regulatory framework for Open Banking and Open Finance…
… and we are delivering on this through the Data Bill, which is currently progressing through Parliament.
Earlier this month, I also announced this Government’s plans for regulating cryptoassets, including a new regulated activity for stablecoin issuance in the UK.
The future role of stablecoin remains a live question…
… and there are potential opportunities on both the retail and the wholesale side.
While these developments in digital spaces are exciting…
..I also know that face to face banking is really important for some people.
So I was delighted that banks have committed to roll out 350 banking hubs to provide critical cash and banking services across the country.
And this is just a first step in my mission to ensure everyone has access to the financial services and products they need.
You might know that today is Economic Abuse awareness day.
5.5 million women in this country have experienced economic abuse this year.
Partners or family members restricting their access to exactly the products and services I’m talking about…
… stripping them of the freedom and independence that is rightfully theirs.
Tackling economic abuse is a key part of my financial inclusion agenda…
… and so I especially welcome any efforts to make sure financial services meet everyone’s needs.
It is more important than ever to be talking about this issue…
… and I am proud to be joining Surviving Economic Abuse’s event in Parliament later today.
When we consider how best to improve the lives of people across the UK, we know that partnerships with financial centres around the world are key.
That will be at the top of my mind as we work to progress those relationships in the coming months…
… and work to secure free and open trade with our most economically important partners – …
… whether that’s the United States, our single biggest destination for financial services trade…
… economies like India – with whom we are holding a Financial Dialogue next week, and will be resuming trade talks shortly…
… and the likes of China and the Gulf States…
As well as, of course, the European Union.
These are all vital steps being taken in the here and now.
And to ensure that the sector remains competitive and continues to make the most of all talent available, regardless of gender or background…
…we’ve pledged to hold it to account on progress made towards accelerating the objectives of the Women in Finance charter.
At Mansion House, we also took the first step towards creating a longer-term sector plan…
… as we committed to publishing the first ever Financial Services Growth and Competitiveness Strategy in the Spring.
This will serve as the guiding framework through which we will pursue sustainable, inclusive growth for the sector over the next 10 years…
… and the call for evidence sets out five cross-sector policy pillars that will form the basis of the strategy.
I am pleased to say that regional growth is one of those pillars…
… alongside innovation and tech…
…the regulatory environment…
…skills and access to talent…
…and international partnerships and trade…
… all issues that I know will also be critical to the success of firms up and down the country.
And I want to ask for your help in putting this strategy together.
Because a long-term vision for the sector can only work if it has the sector’s support.
So this the development of the strategy will be a co-design process.
The Call for Evidence closes on 12 December, and I hope everyone here today will consider providing their views.
I know you have a fascinating agenda for the rest of the day…
… and I hope to hear more about the outcome of your discussions in the coming days and weeks.
The government has been clear about its central mission:
To deliver economic growth.
That cannot happen without thriving financial services in every part of the UK.
So I hope you find today to be productive and rewarding…
… and I hope that from today, you will be certain that this government wants to work with you…
… so that your businesses – and this country – can grow together.
Thank you very much.