Telegraph readers need no reminder about the importance of financial services to the success of this great nation.
In 2022-23 the sector generated more than £275 billion, representing a remarkable 12 per cent of our overall economic output.
Once HMRC has rung this through the till, the City of London typically contributes enough tax to fund our entire defence budget.
Roman settlers recognised the strategic importance of London as a trading centre long ago. They established a bridgehead on the river Thames – laying the foundation for the vibrant hub for trade and commerce.
The sector employs 2.5 million people across the country. Our reputation for straight dealing, use of the English language and common law means we are a safe pair of hands, which is why we’re trusted to execute half of the world’s foreign exchange deals – seeing $3.75 trillion pass through the City every day and lead the world in the insurance market.
The Chancellor and I, as two guardians of our economic prosperity, are capitalising on the sector’s immense potential. We are implementing an ambitious and comprehensive range of reforms, aimed at dismantling barriers and fostering innovation to propel economic growth.
But much like the satirical revolutionaries in the classic Monty Python scene who asked what the Romans did for them, some commentators are a little off the pace with just how much reform is already in flight.
To them I say: we are making great progress.
This week saw a pair of significant milestones achieved. It has been six productive months since we launched the Edinburgh Reforms. These are already transforming the culture of our financial regulation, streamlining the process of listing and raising follow-on capital, improving investment research, and allowing founders to list earlier and to retain more flexibility.
We have aligned regulatory bodies with our growth agenda, providing them with a new additional objective that obliges them to help grow the economy and make the UK be more internationally competitive; we have scrapped restrictive rules on pension fund managers, incentivising investment in British enterprises; we have changed – in law – the rulebook for wholesale markets, which will boost liquidity by giving greater choice to firms on where and how to trade; and unveiled updated strategies for the UK to lead the world on sustainable finance, open finance and web 3.0 finance.
The second milestone attained was entering the final furlong of the Financial Services and Markets Bill in Parliament. This is a once-in-a-generation opportunity to take control of our rulebook and have regulations that both reflect today’s circumstances and can be changed in an agile way going forward.
It will ensure our financial services sector remains at the forefront of developments in technology. It will sensibly prune a rulebook formerly set in Brussels for 28 nations to produce instead a sleeker, nimbler UK model fit for these times. This will make investment flow more freely around the whole of our nation, and continue to attract the firms of tomorrow to list on the London Stock Exchange.
And we have more changes in store, including revisions to the Solvency II framework and reforms to pension funds, which will unlock billions of pounds to drive growth and better returns for long-term savers in retirement.
Taken together, this is a bumper package for the sector, which will maintain our status as a world-leading centre for financial services.
The year 2023 is set to be a banner one for the sector, and the naysayers should set aside their backward-looking grumbling and engage with our reform agenda. Let us join forces and cement the UK’s position as the pre-eminent destination for conducting business on a global scale.
Andrew Griffith is City minister
