Hm Treasury
Good evening, everyone, and thank you for the invitation to speak to you. And thank you Miles for your kind introduction.
Your contribution to the sector, to the economy, to peoples lives is well known.
Along with related professional services, you contribute over 10% of the countrys GDP, 2.2 million jobs. The largest capital market in Europe and the second largest in the world. And thats before we think about nearly
76 billion in total taxes which is enough to fund the entire police force and school system.
The UK is fortunate to have such a strong sector. We know that you have a choice of where to locate and will never take you for granted.
You are part of our history.
London was one of the first ever stock exchanges to be founded.
This year marks 250 years since a group of stockbrokers
moved to Sweetings Alley to set up a formal club.
Before then, for close to a century, theyd be working out of the Citys coffee houses because they were deemed too uncouth and rude to be allowed into the Royal Exchange, the Citys centre of commerce.
Of course, Im sure nobody at all would have that view today!
But in all seriousness, from those humble coffee house roots shared by insurers at Lloyds Coffee Shop the entire financial services sector has become a data and markets giant.
From early trading in precious metals, to the telegraph revolution, ticker tape and real time prices. And in between all of the innovation, supporting war efforts, funnelling money into infrastructure and tackling the issues of the day.
We are at our best when we are contributing to solutions to national and global challenges.
It was almost a year ago today that we received intelligence about tanks amassing on the Russian border with Ukraine.
As Putins barbaric invasion got under way, you came together to help deliver the biggest economic sanctions in history.
With the help of the UK insurance sector really the worlds insurance sector we followed this by implementing a price cap on Russian oil, further undermining Russias ability to profit from aggression.
And finally, when peoples livelihoods were at risk from a global pandemic, you stepped in to help us support businesses and families with your payments capabilities. So for everything that everyone in this room has done and your individual leadership thank you.
As we emerge from a difficult few years for our country, we need to turn our attention to the long-term.
We have five clear priorities.
Halve inflation. Grow the economy. Reduce debt. Cut waiting lists. And stop the boats.
Three of these priorities are about the economy. Thats because the prosperity that its our job to deliver can only come on the back of economic stability and growth.
Yes there are economic headwinds, but we have the highest employment rate for half a century, inflation is lower than 14 other EU countries, and the private sector has grown by 7.5% in the last year.
And last week a survey of business leaders by PWC said the UK was the third-most attractive country for CEOs expanding their businesses.
As the Chancellor said last Friday, our vision for the UK is an enterprise culture built on low taxes, reward for risk, access to capital and smarter regulation.
With volatile markets and high inflation, sound money must come first but our ambition is to have nothing less than the most competitive tax regime of any major country.
Delivering stability means making sensible choices on spending to tame inflation: not exposing the most vulnerable, but also not believing we can simply spend our way to prosperity.
As a former CFO myself, I know the importance of balancing the books and I recall graphicly what it was like trying to issue capital in the uncertain markets post 2008.
But we are well placed. All of the natural advantages which have brought us here remain. Our language, culture, great cities and the rule of law.
Our universities are ranked second globally for their quality and include three of the worlds top ten. In order to support the ground-breaking work they do, the government has protected our 20 bn research budget, now at the highest level in history.
Your government has a mandate and a majority and only this week Parliament was passing important financial services legislation.
The Prime Minister has set out five domains of outsize growth and potential where Britain is up with the very best in the world.
Advanced manufacturing, the clean energy revolution, life sciences and digital technology. And of course, financial services.
As your champion I make the case that we count twice. For without efficient and effective capital markets we cannot hope to exploit the potential of the others.
We are fortunate to be one of the worlds top two financial hubs and the worlds largest net exporter of financial services. Your capability to deploy capital behind innovation combined with our research strengths, makes our aspiration to be a technology superpower ambitious but highly achievable.
One would think it was self-evident that growth is good.
As Robert Colvile, Director of the Centre for Policy
Studies, argues in his report The Morality of Growth that to some, growth has become the enemy.
Obviously, I disagree. This entire Government does.
Thats important because the private sector, we must never forget, is what drives growth and lets us invest in public services.
And, as Colvile writes, firms are most effective at doing good when they do well when they are profitable and successful and attractive employers.
Let me speak personally for a moment. As we chart our course in a globally competitive marketplace, we have to be clear eyed about what it is that we want to be good at.
My view is simple: if we cant be globally effective in financial services, we should all go home now.
It is my job to help you achieve that. To remove friction, to support and celebrate risk takers and to shape regulatory frameworks that are well regarded but agile.
As Ive said before, this sector has had more reviews than Netflix. Many of the authors and contributors are here tonight. We know what we want to do. Now is the moment to get on and deliver.
We are taking this forward in a number of ways: through the Financial Services and Markets Bill, and through the Edinburgh Reforms.
Unleashing the sector, realising potential, delivering for you and for UK plc.
My ambition is for us to be the global financial hub - using our strengths to enhance strong relationships with jurisdictions all around the world, attracting investment and increasing opportunities for cross-border trade.
I want to work hand-in-glove with you this year on the priorities I have agreed with the Chancellor.
First, is to deliver the Financial Services and Markets Bill.
To get that on the statute book by Easter so we can unlock the reforms it contains.
Second, as Ive alluded to, is boosting competitiveness by delivering the Edinburgh Reforms.
Third, and related, is to unleash private capital to invest in all those growth sectors I mentioned earlier.
And fourth, I want us to bolster financial inclusion and support retail savers and investors.
Good regulation has the power to be a positive tool to enable you all to compete in a global world.
I am grateful to TCUK for your work on how the regulators authorisation processes can be made more efficient.
This is an important area, and one that I have raised with the leadership of the FCA and the PRA.
I am pleased that they have committed to make improvements and I am grateful for their collaboration.
In order to strike a better overall balance, the Financial Services and Markets Bill will introduce a new secondary objective in law for the PRA and the FCA on growth and international competitiveness.
Thats important, and taken with a number of other measures, we do expect to see a real change.
And I want to put to bed any idea that this is about a race to the bottom: the governments vision is about making UK regulation more proportionate and simpler whilst retaining high regulatory standards.
Nor do we seek to diverge for divergences sake. In running international businesses, no one wants to add extra complexity or difference. The ambition of a European MoU remains.
Whether its implementing the outcomes of Lord Hills Listing Review or making regulation more tailored for the UK market, were ensuring we remain one of the best countries in the world to do business.
As the Chancellor laid out just days ago, if were going to have successful Enterprises growing companies need capital.
That is why we have selectively used the regulatory flexibility we now have.
One of the most tangible examples - one that will unlock over 100 billion of pounds for productive investment, creating jobs and prosperity is reforming Solvency II.
It is a change that will unleash capital into productive investments, such as offshore wind.
It will allow the insurance sector to play an ever-greater role in providing opportunity to left behind communities and our transition to Net Zero, with the industry expecting to invest more than 100 billion over the next decade.
Good for business: good for the country.
And then theres an issue close to my heart: financial inclusion.
What does that mean?
It means making sure all people, regardless of their background or income, have access to the useful products and services which help them