Westminster Hall — sitting of 1 September 2026: transcript & video

00:02 - 04:11

Speaker 2

Before turning to today's topic for debate, can I congratulate my right honourable friend, the member for Northampton North, on her reappointment as Economic Secretary to the Treasury. In her first spell, she was a formidable advocate for UK financial and professional services, and so I think we're all very fortunate that we have her back for a second act, and I wish her well in the time ahead. Today, Mr. Twigg, I want to make a positive case for the future of the UK's financial services sector and why it should lie at the very heart of the UK's, this government's strategy for backing Britain's wealth creators, standing behind entrepreneurs with a bright idea, and making sure that we channel capital towards the innovators and builders who will drive growth in every part of this country, while also ensuring that the sector provides people with the tools, wherever they live and whatever their circumstances, to participate fully in a modern economy and a modern society, through a bank account that works and that they can access, savings and investments that build real financial security, and insurance that protects families, homes, and businesses when life throws its inevitable curveballs at them. With financial and professional services employing around one in 13 workers across the UK, two-thirds of them outside of London, this is no longer a niche interest for the UK, or even a City of London story alone; it is a genuine national endeavour. Now, when I meet people across the Buckingham and Bletchley constituency that I represent here in Parliament, from the small business owners to the families that I meet on the doorstep, or to the staff at Allica Bank or Santander UK, both of whom have their headquarters in Milton Keynes, serving customers the length and breadth of Britain, I see the same thing: a national industry built for all of us.

And so in the time available, I want to set out five challenges, opportunities facing the sector in the years ahead. First, the need to go even further in mobilizing a greater share of domestic capital towards domestic assets, in particular high-growth businesses, and especially those aligned with the industrial strategy eight sectors and infrastructure. Now, I welcome the former Chancellor's Mansion House speech in July and the progress that this government has made against the Financial Services Growth and Competitiveness Strategy one year after its publication, and building on the progress made by its predecessor government. And we've seen 28 billion pounds of equity capital raised in London since the start of last year, a Pension Schemes Act passed in the last parliamentary session, which is expected to deliver an additional 29,000 pounds in pension savings over an average career, and eight firms now authorized to provide targeted support to savers, benefiting around 18 million consumers, our constituents, over the coming decade. This is welcome progress in turning the overly cautious British saver into the responsible investor.

But I believe that we can and must go even further in unlocking our largest pools of pension, insurance, and retail capital.

Now when we were debating the Pension Schemes Act earlier this year, the case against mandating UK investment rested on two grounds. First, the principle that government shouldn't tell institutions or individuals where and how to invest. And second, that if UK investments were good enough, then funds would already be backing them. Yet what I think this argument missed is the trend towards passive global indexing that we've seen over the last few decades, which has mechanically reduced UK equity allocations to around 4% regardless of the underlying fundamentals. And I suspect without further intervention, that trend will see declining even further in the years ahead.

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