Category: Economy

The speech made by Rachel Reeves, the Chancellor of the Exchequer, at the Innovate Finance Global Summit held on 29 April 2025.

Thank you Janine, and good afternoon everyone.

It’s a pleasure to be here today to mark the 11th year of UK FinTech Week …

… brought together once again by Innovate Finance…

…who continue to champion tirelessly our FinTech sector.

As Chancellor, I’ve always said it’s my job to back the builders…

… back the wealth creators…

…and the job creators.

So my job is to back all of you in this room.

After all, it’s thanks to your work that the UK is a world leader in FinTech.

When I was working at the Bank of England 20 years ago…

…FinTech was in its infancy…

…an offshoot of financial services…

…and there was certainly no such thing as FinTech week.

But times have changed, the industry has changed.

Last year, the UK’s FinTech sector attracted $3.6 billion of investment – more than any other country bar the US.

Almost half of Europe’s FinTech unicorns are based here in Britain…

…and roughly a third of all UK unicorns are FinTechs – a higher share than anywhere else.

Companies like Allica Bank and Zilch, who were both recently named among the fastest growing companies in Europe by the Financial Times …

…Or Zopa, for whom 2024 marked another year of extraordinary economic growth.

Last week when I was in Washington for the IMF Spring Meetings…

… I spoke to industry, legislators, and policymakers…

…as well as US firms already operating here in the UK.

I set out our strengths as an open trading nation with trade links around the world…

…and as a nation that can provide political and financial stability and certainty to businesses…

…in an uncertain world.

The UK has a long history of breaking new ground in Financial Services.

We were the first country to develop uniform Open Banking standards…

…and we were one of the first countries to establish a system for near-instant digital payments with the Faster payments system in 2008.

In my Mansion House speech last year, I published the National Payments Vision…

… setting out the government’s ambition for seamless account-to-account payments…

…and demonstrating our commitment to a regulatory environment that cares about managing the burden we put on businesses.

Something that we will build in with the consolidation of the Payment Systems Regulator into the FCA.

The UK is Europe’s leading hub for investment…

…raising more equity capital than the next three European exchanges combined last year.

I am committed to building on these strong foundations…

…with an ambitious programme of reforms.

Last September I chose to extend the UK’s generous venture capital schemes…

… the Enterprise Investment Scheme and the Venture Capital Trust scheme…

…which – alongside the Seed Enterprise Investment Scheme – offer generous tax reliefs…

…in return for investing in British business.

And we will soon publish the final Pension Investment Review, ahead of the introduction of the Pension Schemes Bill…

…where we will legislate to unlock up to £80 billion of investment into companies like yours…

start-up, scale-up, and fast growing businesses.

…delivering a major consolidation of the Defined Contribution market and the Local Government Pension Scheme…

…so that pension funds have sufficient scale to invest in growing industries like FinTech.

I am determined to make sure that the UK remains one of the best places in the world for FinTechs to start-up, scale-up and to list…

…benefitting from our stable and liquid markets.

Last July, the FCA implemented a fundamental rewrite of the UK’s Listing Rules, the biggest reforms in a generation.

These new rules now put the UK in line – or in many cases ahead – of other global markets in giving companies the flexibility to pursue their growth ambitions…

…backing their aspiration…

…and allowing them to raise large amounts of capital more easily.

And for those companies who want to remain private for longer, we are developing the new Private Intermittent Securities and Capital Exchange System – or PISCES…

…which we will legislate for next month.

This is a brand new type of stock exchange for trading private company shares…

…supporting private companies to scale and grow…

…and providing a steppingstone to IPO.

Finally, we’ve reformed the rules to allow greater investment research to be produced on UK listed companies…

…and reducing the burdens imposed on public companies through the UK’s Corporate Governance Code.

I want the UK to be a place where you can take risks…

…innovate and experiment…

…and find new ways to deliver for your customers.

When I met with senior leaders from across the FinTech sector last month…

…you told me about the importance of getting the balance of regulation right…

…especially on digital assets.

I agree.

While the UK will always be committed to high international standards…

…I am determined that our regulatory framework supports economic growth.

That’s why I’m delighted that we are today publishing draft legislation for the UK’s comprehensive regulatory regime for cryptoassets…

…engaging with all of you to ensure that the final legislation – planned for later this year – delivers for government and most importantly for the industry…

…and makes the UK a great place for digital asset companies to invest and innovate.

For the UK to be a world-leader in digital assets…

…international cooperation is vital.

Which is why I discussed continued U.S. and UK engagement with Secretary Bessent last week…

…including further dialogue at the upcoming UK-U.S. Financial Regulatory Working Group in June…

…to support the use and responsible growth of digital assets…

…maintaining the deep historic relationship between the world’s two largest financial centres through this period of significant technological change.

Regulation must support business, not hold it back.

Our regulators were among the first to embrace and develop sandboxes…

…including the Digital Securities Sandbox, where I’m delighted that we already have a broad range of firms all looking at different proposals for tokenising our financial markets.

Last November, I announced that this government will issue a Digital Gilt Instrument…

…an entirely new debt instrument…

…using distributed ledger technology…

this will enable us to experience first-hand the benefits of digital technologies in debt issuance.

And I know that there is appetite to go further.

Last week, Secretary Bessent and I also discussed how our officials could explore opportunities to support industry to innovate cross-border…

…in line with proposals put forward by US Securities and Exchange Commissioner Hester Peirce about a transatlantic sandbox for digital securities…

…potentially allowing greater digital collaboration between capital markets in New York and London.

I’ve talked about what we’ve already done, and some ideas for the future.

Financial services is one of the key growth-driving sectors in the UK’s modern industrial strategy…

….with FinTech as a priority growth opportunity…

…and I look forward to publishing the Financial Services Growth and Competitiveness Strategy at my upcoming Mansion House address…

…which I can today confirm will take place on the 15th July.

At Mansion House last year I set out my vision on economic growth…

…and the new approach required to build sustainable growth…

…on a platform of stability.

At Mansion House this year I’ll talk about how we can go further and faster in realising that growth.

By publishing the Financial Services Growth and Competitiveness Strategy…

…I will set out our strategy for the rest of this parliament and beyond…

…building on our strengths in areas including capital markets, insurance and asset management…

… supporting firms to innovate by ensuring they can access and develop the talent they need…

…and promoting the UK as a great place to do business globally.

Backing the builders in FinTech means improving outcomes for businesses and consumers…

…revolutionising how we invest and trade…

And driving growth and prosperity, here in the UK.

It’s incredible how far Fintech has come in the past decade…

And I’m enormously optimistic about the future.

From the huge growth of the sector that has already taken place…

…to the passion, drive and commitment I see from all of you to make FinTech a huge UK success story…

…it is clear that our job in government is to back you, back the builders, back the change makers all the way.

And I am ready to do just that.

Thank you very much.

The statement made by Rachel Reeves, the Chancellor of the Exchequer, in the House of Commons on 26 March 2025.

This Labour Government were elected to bring change to our country, to provide security for working people and to deliver a decade of national renewal. That work began in July, and I am proud of what we have delivered in just nine months: restoring stability to our public finances, giving the Bank of England the foundation to cut interest rates three times since the general election, rebuilding our public services, with record investment in our NHS bringing waiting lists down for five months in a row, and increasing the national living wage to give 3 million people a pay rise from next week.

Now our task is to secure Britain’s future in a world that is changing before our eyes. The threat facing our continent was transformed when Putin invaded Ukraine. It has since escalated further and continues to evolve rapidly. At the same time, the global economy has become more uncertain, bringing insecurity at home as trading patterns become more unstable and borrowing costs rise for many major economies. The job of a responsible Government is not simply to watch this change. This moment demands an active Government—a Government not stepping back but stepping up, a Government on the side of working people helping Britain reach its potential. We have the strengths to do just that as one of the world’s largest economies, an ally to trading partners across the globe, and a hub for global innovation. These strengths and the progress we have made so far mean that we can act quickly and decisively in a more uncertain world to secure Britain’s future and to deliver prosperity for working people.

As I set out at the Budget last year, I am today returning to the House to provide an update on our public finances, supported by a new forecast from the independent Office for Budget Responsibility, ahead of a full spending review in June. I will then return to the House in the autumn to deliver a Budget in line with our commitment to deliver just one major fiscal event a year.

Let me now turn to the OBR’s forecasts; I want to thank Richard Hughes and his team for their dedicated work. The increased global uncertainty has had two consequences: first on our public finances and secondly on our economy. I will take each in turn.

In the autumn, I set out our new fiscal rules that would guide this Government. These fiscal rules are non-negotiable. They are the embodiment of this Government’s unwavering commitment to bring stability to our economy and to ensure security for working people, because the British people have seen what happens when a Government borrow beyond their means. The mini-Budget delivered by the Conservatives resulted in higher bills, higher rents and higher mortgages, and it was not the wealthy who suffered most when they crashed the economy; it was ordinary working people. They continue to feel the effects two and a half years later of the damage that the Conservatives did.

Let me be clear: there is nothing progressive, there is nothing Labour, about working people paying the price for economic irresponsibility. The British people put their trust in this Labour Government because they knew that we—they knew that I—would never take risks with the public finances and would never do anything to put household finances in danger. We must earn that trust every single day.

I set out two rules at the Budget. The first was our stability rule, which ensures that public spending is under control, balancing the current budget by 2029-30 so that day-to-day spending is met by tax receipts. The second was our investment rule to drive growth in the economy, ensuring that net financial debt falls by the end of the forecast period, while enabling us to invest alongside business.

Turning first to the stability rule, the OBR’s forecast shows that before the steps that I will take in this statement, the current budget would have been in deficit by £4.1 billion in 2029-30, having been projected to be in surplus by £9.9 billion in the autumn, as the UK, alongside our international peers like France and Germany, has seen the cost of borrowing rise during this period of heightened uncertainty in global markets. As a result of the steps that I am taking today, I can confirm that I have restored in full our headroom against the stability rule, moving from a deficit of £36.1 billion in 2025-26 and £13.4 billion in 2026-27 to a surplus of £6 billion in 2027-28, £7.1 billion in 2028-29 and £9.9 billion in 2029-30. That compares with the headroom left by the previous Government of just £6.5 billion. That means that we are continuing to meet the stability rule two years early, building resilience to shocks in this, a more uncertain world.

The OBR forecast that the investment rule would also be met two years early, with net financial debt of 82.9% of GDP in ’25-26 and 83.5% in ’26-27, before falling to 83.4% in ’27-28, to 83.2% in 2028-29 and then to 82.7% in 2029-30, providing headroom of £15.1 billion in the final year of the forecast, broadly unchanged from the autumn forecast.

After the last Government doubled the national debt—[Interruption.] After they doubled the national debt, debt interest payments now stand at £105.2 billion this year. That is more than we allocate to defence, the Home Office and the Ministry of Justice combined. That is the legacy of the Conservative party. The responsible choice is to reduce our levels of debt and borrowing in the years ahead, so that we can spend more on the priorities of working people, and that is exactly what this Government will do. I said that our fiscal rules were non-negotiable and I meant it. I will always deliver economic stability and I will always put working people first. I said it at the election; I said it at the Budget; and I say it again today.

Let me now set out the steps that the Government have taken. At the Budget we protected working people by keeping our promise not to raise their rates of national insurance, income tax or VAT. At the same time, we began to rebuild our public services after the Conservatives left a £22 billion black hole in our public finances. Ours were the right choices: the right choices for stability and the right choices for renewal, funded by the decisions that we took on tax.

As I promised in the autumn, this statement does not contain any further tax increases, but when working people are paying their taxes while still struggling with the cost of living, it cannot be right that others are still evading what they rightly owe in tax. In the Budget, I delivered the most ambitious package of measures we have ever seen to cut down on tax evasion, raising £6.5 billion per year by the end of the forecast. Today I go further, continuing our investment in cutting-edge technology, investing in HMRC’s capacity to crack down on tax avoidance, and setting out plans to increase the number of tax fraudsters charged every year by 20%. These changes raise a further £1 billion, taking the total revenue raised from reducing tax evasion, under this Labour Government, to £7.5 billion. These figures are verified by the Office for Budget Responsibility and I to thank my hon. Friend the Exchequer Secretary for his continued work in this area.

Last week, my right hon. Friend the Secretary of State for Work and Pensions set out this Government’s plans to reform the welfare system. The Labour party is the party of work: we believe that if you can work, you should work, but if you cannot work, you should be properly supported. This Government inherited a broken system: more than 1,000 people every day are qualifying for personal independence payments; one in eight young people are not in employment, education or training. If we do nothing, we are writing off an entire generation. That cannot be right and we will not stand for it. It is a waste of their potential and it is a waste of their futures, and we will change it.

As my right hon. Friend said in her statement last week, the final costings will be subject to the OBR’s assessment. Today, the OBR has said that it estimates that the package will save £4.8 billion in the welfare budget, reflecting its judgments on behavioural effects and wider factors. This also reflects final adjustments to the overall package, consistent with the Secretary of State’s statement last week and the Government’s “Pathways to Work” Green Paper.

The universal credit standard allowance will increase from £92 per week in 2025-26 to £106 per week by 2029-30, while the universal credit health element will be cut for new claimants by around 50% and then frozen.

On top of that, we are investing £1 billion to provide guaranteed, personalised employment support to help people back into work, and £400 million to support the Department for Work and Pensions and our jobcentres to deliver these changes effectively and fairly, taking total savings from the package to £3.4 billion. While spending on disability and sickness benefits will continue to rise, these plans mean that welfare spending as a share of GDP will fall between 2026 and the end of the forecast period, which is very different from what we inherited from the Conservative party. We are reforming our welfare system, making it more sustainable, protecting the most vulnerable and, most importantly, supporting more people back into secure work and lifting them out of poverty.

At the Budget, I fixed the foundations of our economy to deliver on the promise of change. That work has already begun. There are some 2 million extra appointments in our NHS; waiting lists are down; new breakfast clubs are opening across England; there have been the largest settlements in real terms for Scotland, Wales and Northern Ireland in the history of devolution; and asylum costs are falling—promises made, and promises kept, and every single one of them was opposed by Opposition parties.

At the Budget, alongside providing an increase in funding for this year and next, I set the envelope for the spending review, which we will deliver in June, led by the Chief Secretary to the Treasury. That will set departmental budgets until 2028-29 for day-to-day spending, and until 2029-30 for capital spending.

Today’s statement reflects two steps that we have taken on our spending plans. First, because we are living in an uncertain world, as the Prime Minister has set out, we will increase defence spending to 2.5% of GDP and reduce overseas aid to 0.3% of gross national income. That means that we save £2.6 billion in day-to-day spending in 2029-30 to fund our more capital-intensive defence commitments. Secondly, in recent months, we have begun to fundamentally reform the British state, driving efficiency and productivity across Government to deliver tangible savings and improve services across our country.

Earlier this month, the Prime Minister set out our plans to abolish the arm’s length body NHS England, and to ensure that money goes directly to improving the service for patients. The Secretary of State for Health and Social Care is driving forward vital reforms to increase NHS productivity, and is bearing down on costly agency spend to save money so that we can improve patient care.

The Chancellor of the Duchy of Lancaster is taking forward work to reduce the cost of running Government significantly—by 15%. That will be worth £2 billion by the end of the decade. This work shows that we can make our state leaner and more agile, and deliver more resources to the frontline, while ensuring that we control day-to-day spending to meet our fiscal rules.

Today, I build on that work by bringing forward £3.25 billion of investment to deliver the reforms that our public services need through a new transformation fund. That is money brought forward now to bring down the cost of running Government by the end of the forecast period by making public services more efficient, more productive and more focused on the user. I can confirm today the first allocations from this fund, including funding for voluntary exit schemes to reduce the size of the civil service, and for pioneering artificial intelligence tools to modernise the state; investment in technology for the Ministry of Justice to deliver probation services more effectively; and up-front investment so that we can support more children in foster care, to give them the best possible start in life and reduce cost pressures in the future.

Our work to make Government leaner, more productive and more efficient will help deliver a further £3.5 billion of day-to-day savings by 2029-30. Overall, day-to-day spending will be reduced by £6.1 billion by 2029-30, and it will now grow by an average of 1.2% a year above inflation; for comparison, in the autumn, that figure was 1.3%. I can confirm to the House that day-to-day spending will increase in real terms above inflation in every single year of the forecast. In the spending review, apart from the reductions in overseas aid, day-to-day spending across Government has been fully protected.

I can also confirm our approach to capital investment. In the autumn Budget, I announced £100 billion of additional capital spending to crowd in investment from the private sector, in order to fix our crumbling infrastructure and create jobs in every corner of our country. Today, I am not cutting capital spending, as the Conservative party did time and again, because that choked off growth and left our school roofs literally crumbling. That was the wrong choice. It was the irresponsible choice. It was the Tory choice. Today, I am instead increasing capital spending by an average of £2 billion per year, compared with in the autumn, to drive growth in our economy and to deliver in full our vital commitments on defence. This Government will ensure that every pound we spend will deliver for the British people by increasing productivity, driving growth in our economy and improving our frontline public services.

Let me turn to the impact of increased uncertainty on our economy. To deliver economic stability, we must work closely with the Bank of England, supporting the independent Monetary Policy Committee to meet the 2% inflation target. There have been three interest rate cuts since the general election, and today’s data shows that inflation fell in February, having peaked at 11% under the previous Government. The Office for Budget Responsibility forecasts that consumer prices index inflation will average 3.2% this year, before falling rapidly to 2.1% in 2026 and meeting the 2% target from 2027 onwards, giving families and businesses the security that they need, and providing our economy with the stable platform that it needs to grow.

Earlier this month, the OECD downgraded this year’s growth forecast for every G7 economy, including the UK, and the OBR has today revised down our growth forecast for 2025 from 2% in the autumn to 1% today. I am not satisfied with these numbers. We Labour Members are serious about taking the action needed to grow our economy; we are backing the builders, not the blockers, with a third runway at Heathrow airport and through the Planning and Infrastructure Bill. We are increasing investment with reforms to our pension system and a new national wealth fund, and tearing down regulatory barriers in every sector of our economy. That is a serious plan for growth. That is a serious plan to improve living standards. That is a serious plan to renew our country.

A changing world presents challenges, but also opportunities for new jobs and new contracts in our world-class defence industrial centres from Belfast to Deeside, and from Plymouth to Rosyth. In February, the Prime Minister set out our Government’s commitment to increasing spending on defence to 2.5% of GDP from April 2027—the biggest sustained increase in defence spending since the end of the cold war—and an ambition to spend 3% of GDP on defence in the next Parliament. That was the right decision in a more insecure world—we are putting an extra £6.4 billion into defence spending by 2027—but we have to move quickly in this changing world, and that starts with investment. Today, I can confirm that I will provide an additional £2.2 billion for the Ministry of Defence in the next financial year—a further down payment on our plan to deliver 2.5% of GDP by 2027. This additional investment is about increasing not just our national security, but our economic security.

As defence spending rises, I want the whole country to feel its benefits, so I will now set out the immediate steps that we are taking to boost Britain’s defence industry, and to make the UK a defence industrial superpower. We will spend a minimum of 10% of the Ministry of Defence’s equipment budget on new, novel technologies, including drones and artificial intelligence-enabled technology, driving forward advanced manufacturing production in places like Glasgow, Derby and Newport, creating demand for highly skilled engineers and scientists, and delivering new business opportunities for UK tech firms and start-ups. We will establish a protected budget of £400 million in the Ministry of Defence—a budget that will rise over time—for UK defence innovation, and a clear mandate to bring innovative technology to the frontline at speed.

We will reform our broken defence procurement system, making it quicker, more agile and more streamlined, and giving small businesses across the UK better access to Ministry of Defence contracts—something welcomed by the Federation of Small Businesses. We will take forward our plan for Barrow, a town at the heart of our nuclear security, working with my hon. Friend the Member for Barrow and Furness (Michelle Scrogham). We are providing £200 million to support the creation of thousands of jobs there. We will regenerate Portsmouth naval base, securing its future, as called for by my hon. Friend the Member for Portsmouth South (Stephen Morgan). We will secure better homes for thousands of military families—the homes that they deserve, which were denied to them by the previous Government—in the constituencies of my hon. Friends the Members for Plymouth Moor View (Fred Thomas), for Plymouth Sutton and Devonport (Luke Pollard) and for York Outer (Mr Charters) and in Aldershot. That is the difference that this Labour Government are making.

Finally, we will provide £2 billion of increased capacity for UK Export Finance to provide loans for overseas buyers of UK defence goods and services. I want to do more with our defence budget, so that we can buy, make and sell things here in Britain. I want to give our world-leading defence companies and those who work in them further opportunities to grow, and to create jobs in Britain, as military spending rightly increases all across Europe. To oversee all this vital work, my right hon. Friend the Defence Secretary and I will establish a new defence growth board to maximise the benefits from every pound of taxpayers’ money that we spend, and we will put defence at the heart of our modern industrial strategy to drive innovation, which can deliver huge benefits for the British economy. That is how we make our country a defence industrial superpower, so that the skills, jobs and opportunities of the future can be found right here in the United Kingdom.

As the previous Government learned to their detriment, there are no shortcuts to economic growth. It will take long-term decisions. It will take our putting in the hard yards. It will take time for the effect of the reforms that we are introducing to be felt in the everyday economy. It is right that the Office for Budget Responsibility should consider the evidence and look carefully at measures before recognising a growth impact in its forecast, but I can announce to the House that the OBR has considered and has scored one of the central planks of our plan for growth.

In my first week as Chancellor, I announced that we were pursuing the most ambitious set of planning reforms in decades to get Britain building again, and in December we published changes to the national planning policy framework, driven forward tirelessly by my right hon. Friend the Deputy Prime Minister. We are reintroducing mandatory housing targets, and bringing grey-belt land into scope. The OBR has today concluded that these reforms will permanently increase the level of real GDP by 0.2% in ’29-30—an additional £6.8 billion for our economy—and by 0.4% of GDP within 10 years, which is an additional £15.1 billion in the British economy. That is the biggest positive growth impact that the OBR has ever reflected in its forecast, for a policy with no fiscal cost. Taken together with our plans to increase capital spending, which we set out in the Budget last year, this Government’s policies will increase the level of real GDP by 0.6% in the next 10 years. That is the difference that this Labour Government are making.

Those are policies to grow our economy promised by a Labour Government, delivered by a Labour Government and opposed by the parties opposite.

The planning system that we inherited was far too slow. The OBR has concluded that our reforms will lead to house building reaching a 40-year high, with 305,000 homes a year by the end of the forecast period. Changes to the national planning policy framework alone will help build over 1.3 million homes in the UK over the next five years, taking us within touching distance of delivering our manifesto promise to build 1.5 million homes in England in this Parliament. Those are homes promised by this Labour Government, homes built by this Labour Government and homes opposed by the parties opposite.

The impact on our economy goes further still. I said at the election that we could not simply tax and spend our way to prosperity. We need economic growth, so I can today confirm that the effect of our growth policies, including our planning reforms, means an additional £3.4 billion to support our public finances and our public services by 2029-30. Those are the proceeds of growth, promised by this Labour Government, delivered by this Labour Government and opposed by the parties opposite.

Earlier this week, we provided an additional £2 billion of investment in social and affordable homes next year, delivering up to 18,000 new homes, and allowing local areas to bid for new development across our country, including sites in Thanet, Sunderland and Swindon. That is more security for families across the country, promised by this Labour Government, delivered by this Labour Government and opposed by the parties opposite.

To build these new homes, we need people with the right skills. Earlier this week, my right hon. Friend the Education Secretary announced more than £600 million to train up 60,000 more construction workers, including through 10 new technical excellence colleges across every region of the country, giving working people the chance to fulfil their potential. Those are new opportunities for our young people, promised by this Labour Government, delivered by this Labour Government and opposed by the parties opposite.

All this is just the start. The Planning and Infrastructure Bill passed its Second Reading on Monday. That was no thanks to the parties opposite. Once that Bill completes its passage, it will help deliver the homes and infrastructure our country badly needs. I say to the parties opposite: the British people will be watching. If the parties opposite do not support these reforms, let us be clear about what that would mean: they are opposing economic growth, they are opposing more homes for families and they are opposing good jobs across our country. We on the Government Benches are clear about whose side we are on; the parties opposite must decide, too.

This Labour Government are taking the right decisions now to secure Britain’s future. Today, I can confirm to the House that the OBR has upgraded its growth forecast next year and every single year thereafter, with GDP growth of 1.9% in 2026, 1.8% in 2027, 1.7% in 2028, and 1.8% in 2029. By the end of the forecast, our economy will be larger compared with the OBR’s forecast at the time of the Budget. That is the difference that this Labour Government are making.

This is not just about lines on a graph; it is about improving people’s lives. Working people are still feeling the pinch after a cost of living crisis caused by the Conservatives that caused interest rates and inflation to go through the roof, so I am pleased that the OBR confirms today that real household disposable income will now grow this year at almost twice the rate expected in the autumn. Compared with the forecast in the final Budget delivered by the Conservatives, and after taking inflation into account, the OBR says today that households will be on average more than £500 a year better off under this Labour Government. That will mean more money in the pockets of working people and higher living standards—promised by this Labour Government, delivered by this Labour Government and opposed by the parties opposite.

The world is changing. We can see that, and we can feel it. A changing world demands a Government who are on the side of working people, acting in their interest, acting in the national interest, not retreating from challenges, and not stepping back. It demands a Government with the courage to step up to secure Britain’s future and to seize the opportunities that are out there and before us. I am impatient for change. The British people are impatient for change after 14 years of failure, and we are beginning to see change happen. Our plan for change is working. Defence spending is rising. Waiting lists are falling. Wages are up and interest rates are cut. That is the difference that this Labour Government are making.

Today, the OBR confirms that our plan to get Britain building will drive growth in our economy and put more money in people’s pockets. There are no quick fixes, but we have taken the right choices: returning stability to our economy after years of mismanagement by the party opposite, and delivering security for our country and security for working people. That is what drives this Government; that is what drives me as Chancellor; and, that is what drives the choices I have set out today. I commend this statement to the House.

The speech made by Rachel Reeves, the Chancellor of the Exchequer, on 29 January 2025.

Thank you everyone.

It’s fantastic to be here at Siemens at this amazing facility.

Today, I want to talk about economic growth.

Why it matters.

How we achieve it.

And what we are going to do further and faster to deliver it.

Before we came into office…

… the Prime Minister and I have said loud and clear:

Economic growth is the number one mission of this government.

Without growth, we cannot cut hospital waiting lists or put more police on the streets.

Without growth, we cannot meet our climate goals…

… or give the next generation the opportunities that they need to thrive.

But most of all…

… without economic growth…

… we cannot improve the lives of ordinary working people.

Because growth isn’t simply about lines on a graph.

It’s about the pounds in people’s pockets.

The vibrancy of our high streets.

And the thriving businesses that create wealth, jobs and new opportunities for us, for our children, and grandchildren.

We will have succeeded in our mission when working people are better off.

I know that the cost of living crisis is still very real for many families across Britain.

The sky high inflation and interest rates of the past few years have left a deep mark…

… with too many people still making sacrifices to pay the bills and to pay their mortgages.

But we have begun to turn this around.

Everything I see as I travel around the country gives me more belief in Britain.

And more optimism about our future.

Because we as a country have huge potential.

A country of strong communities, with small and local businesses at their heart.

We are at the forefront of some of the most exciting developments in the world…

… like artificial intelligence and life sciences…

… with great companies like DeepMind, AstraZeneca, Rolls Royce… and of course Siemens…

… delivering jobs and investment across Britain.

We have fundamental strengths – in our history, in our language, and in our legal system – to compete in a global economy.

But for too long, that potential has been held back.

For too long, we have accepted low expectations and accepted decline.

We no longer have to do that.

We can do so much better.

Low growth is not our destiny.

But growth will not come without a fight.

Without a government willing to take the right decisions now to change our country’s future for the better.

That’s what our Plan for Change is all about.

That is what drives me as Chancellor.

In my Mais lecture in March last year, I set out my approach to achieving economic growth…

… and identified the fundamental barriers to realising our full potential.

The productive capacity of the UK economy has become far too weak.

Productivity, the driver of living standards…

…has grown more slowly here than in countries like Germany and the US.

The supply side of our economy has suffered due to chronic underinvestment…

… and stifling and unpredictable regulation…

… not helped by the shocks we have faced in recent years.

The strategy that I have consistently set out…

… is to grow the supply-side of our economy…

… recognising that first and foremost…

… it is businesses, investors and entrepreneurs who drive economic growth…

… a government that systematically removes the barriers that they face – one by one and has their back

This strategy has three essential elements:

First, stability in our politics, our public finances and our economy – the basic condition for secure economic growth.

Second, reform – reform which makes it easier for businesses to trade, to raise finance and to build.

And third, investment, the lifeblood of economic growth.

Let me explain each of those in turn.

Stability – the first line of our manifesto was a promise to bring stability to the public finances.

It is the rock upon which everything else is built.

And it is the essential foundation of our Plan for Change.

Because economic stability is the precondition for economic growth.

That’s why the first piece of legislation that we passed as a government was the Budget Responsibility Act…

… so never again will we see our independent forecaster sidelined.

At my first Budget in October…

… it was my duty as Chancellor…

… to fix the foundations of our economy, and repair the public finances that we inherited.

To restore stability and create the conditions for growth and investment.

I set out new fiscal rules which are non-negotiable, and will always be met.

We began to rebuild our NHS and our schools – the start of a programme of public service reform.

I capped the rate of corporation tax – and I extended our generous capital allowances for the duration of this parliament – as the CBI and the BCC have long called for.

And I protected working people after a cost of living crisis…

… by freezing fuel duty…

… and with no increases in their National Insurance, Income Tax or VAT.

But taking the right decisions and the responsible decisions does not always mean taking the easy decisions.

The increase in Employers’ National Insurance contributions has consequences on business and beyond.

I said that up front in my Budget speech.

I accept that there are costs to responsibility.

But the costs of irresponsibility would have been far higher.

Those who oppose my Budget know that too.

That is why, since October, I have seen no alternative put forward.

No alternatives to deal with the challenges we face.

No alternatives to restoring economic stability…

… and therefore no plan for driving economic growth.

Alongside stability, we need to drive forward the reform which makes investment more likely…

… by removing the constraints on the supply side of our economy…

… making it easier for businesses to trade…

… to raise finance…

… and to build.

Let me first address our approach to trade.

We stand at a moment of global change.

In that context, we should be guided by one clear principle above all.

To act in the national interest…

… for our economy…

… for our businesses…

… and for the British people.

That means building on our special relationship with the United States under President Trump.

The Prime Minister discussed the vital importance of growth with the President last weekend…

… and I look forward to working with the new Treasury Secretary, Scott Bessent…

… to deepen our economic relationship in the months and the years ahead.

Acting in our national interest also means resetting our relationship with the EU – our nearest and our largest trading partner – to drive growth and support business.

We are pragmatic about the challenges that we have inherited from the last government’s failed Brexit deal.

But we are also ambitious in our goals.

… we will prioritise proposals that are consistent with our manifesto commitments…

… and which contribute to British growth and British prosperity…

… because that is what the national interest demands.

Our approach to trade also means building stronger relationships with fast-growing economies all around the world.

That is why I led a delegation to China for the first Economic and Financial Dialogue since 2019…

… alongside world-leading financial service businesses, including HSBC, Standard Chartered and Schroders…

… unlocking £600 million of tangible benefits for the UK economy.

And I am pleased to confirm that the Business and Trade Secretary will shortly visit India …

… to restart talks on the free trade agreement and bilateral investment treaty.

Our businesses can only realise these opportunities if they can recruit the skilled staff that they need.

So we are reforming our employment system to create a national jobs and careers service.

We have created Skills England to meet the skills of the next decade in sectors like construction and engineering.

And we will deliver fundamental reform of our welfare system.

That includes looking at areas that have been ducked for too long…

… like the rising cost of health and disability benefits…

… and the Secretary of State for Work and Pensions will set out our plans to address this ahead of the Spring Statement.

Next, the Immigration White Paper, that will bring forward concrete proposals to bring the overall levels of net migration down.

But we know that the UK is in an international competition for talent in vital growth sectors.

That is why last week, I set out plans for attracting global talent.

We will look at the visa routes for very highly skilled people…

… so the best people in the world choose the UK to live, work and create wealth…

… bringing jobs and investment to Britain.

To help businesses access the finance and support they need to grow…

… we have delivered significant reforms to provide greater flexibility for firms and founders to raise finance on UK capital markets, by rewriting the UK’s listing rules.

In my Mansion House speech, I announced a series of reforms to our pensions system…

… including the creation of larger, consolidated funds…

… which have much greater capacity to invest in high growth British companies at the scale that we need them to.

The consultation on these reforms is already complete and the final report will be published in the Spring.

Yesterday we confirmed that we have plans to go further, whilst always protecting the important role that pension funds play in the gilt market.

We will introduce new flexibilities for well-funded Defined Benefit schemes…

… to release surplus funds where it is safe to do so…

… generating even more investment into some of our fastest growing industries.

I know too that businesses are held back by a complex and unpredictable regulatory system…

… and that is a drag on investment and innovation.

We have already provided new growth-focused remits to our financial services regulators…

… we have announced a new interim Chair of the Competition and Markets Authority…

… and we have established the Regulatory Innovation Office, with an initial focus on synthetic biology, space, AI, and connected and autonomous vehicles.

But we need to go further and we need to go faster.

So earlier this month, I met the Heads of some of our largest regulators.

They have already provided a range of options to drive growth in their sectors…

… and proposals for how they can be more agile and responsive to businesses…

… and we will publish that final action plan in March to make regulation work much better for our economy.

To get Britain building again…

… we have delivered the most significant reforms to our planning system in a generation.

I have been genuinely shocked about how slow our planning system is.

By how long it takes to get things done.

Take the decision to build a solar farm in Cambridgeshire – a decision the Energy Secretary took only a few weeks into the job in July…

The Deputy Prime Minister has already driven significant progress across government in addressing these issues.

My colleagues have determined 13 major planning decisions in just six months…

… including for airports, data centres and major housing developments.

We have significantly raised housing targets across our country and made them mandatory, so that we can build one-and-a-half million homes in this parliament.

We have reformed decades-old “green belt” policies, making it easier to build on the “grey belt” land around our major cities.

And we have opened up our planning system to build new infrastructure – like onshore wind farms or data centres driving the AI revolution.

Having listened closely to calls from business groups like the Institute of Directors…

… and businesses across our economy about the need to speed up infrastructure delivery…

… including Mace, Skanska and Arup who are here today…

… and members of our British Infrastructure Taskforce like Lloyds, Blackrock and Phoenix…

… we have now set out plans to go even further.

Last week we confirmed our priorities for the Planning and Infrastructure Bill …

… to rapidly streamline the process for determining applications…

… to make the consultation process far less burdensome…

… and to fundamentally reform our approach to environmental regulation.

The problems in our economy…

… the lack of bold reform that we have seen over decades…

… can be summed up by a £100 million bat tunnel built for HS2…

… the type of decision that has made delivering major infrastructure in our country far too expensive and far too slow.

So we are reducing the environmental requirements placed on developers when they pay into the nature restoration fund that we have created…

…so they can focus on getting things built, and stop worrying about bats and newts.

And to build our new infrastructure like nuclear power plants, trainlines and windfarms more quickly…

… we are changing the rules to stop blockers getting in the way of development…

… through excessive use of Judicial Review.

This Bill, the Planning and Infrastructure Bill, is a priority for this government.

It will be introduced in the Spring…

… and we will work tirelessly in parliament to ensure its smooth, and speedy and rapid delivery.

By providing a foundation of economic stability…

… and by delivering the reforms needed to make it easier for businesses to succeed and grow…

… we will create the right conditions to increase investment in our economy – the final key element of our strategy.

Investment and innovation go hand in hand.

I want to see the sounds and the sights of the future arriving.

Delivered by amazing businesses like Wayve and Oxford Nanopore.

They are the future.

And Britain should be the best place in the world to be an entrepreneur.

That is why we protected funding for research and development…

… and it is why one of the first decisions I made as Chancellor…

… was to extend the Enterprise Investment Scheme and the Venture Capital Trust schemes for a further 10 years…

… to get more investment into new companies, driving their innovation and growth.

I am determined to make Britain the best place in the world to invest.

That was my message in Davos last week.

That ambition demands action.

The International Investment Summit that we hosted in October delivered £63 billion of investment right across our country…

… from Iberdrola doubling its investment in clean energy in places like Suffolk…

… Blackstone investing £10 billion in a data centre in Northumberland…

… and Eren Holdings investing £1 billion in advanced manufacturing in North Wales.

While the lifeblood of growth is business investment, a strategic state has a crucial role to play.

That is why we established the National Wealth Fund…

… to create that partnership between business, private investors and government to invest in the industries of the future…

… like clean energy.

Today I can announce two further investments by the National Wealth Fund.

First, a £65 million investment for Connected Kerb, to expand their electric vehicle charging network across the UK.

And second, a £28 million equity investment in Cornish Metals…

… providing the raw materials to be used in solar panels, wind turbines and electric vehicles…

… supporting growth and jobs in the South-West of England.

There is no trade-off between economic growth and net zero.

Quite the opposite.

Net zero is the industrial opportunity of the 21st century, and Britain must lead the way.

That is why we will publish a refreshed Carbon Budget Delivery Plan later this year, which alongside the Spending Review, will set out our plans to deliver Carbon Budget 6.

Today, I can also announce that we are removing barriers to deliver 16 gigawatts of offshore wind…

… by designating new Marine Protected Areas to enable the development of this technology in areas like East Anglia and Yorkshire…

… crowding in up to £30 billion of investment in homegrown clean power.

And there’s more.

Our industrial and manufacturing base, brilliantly represented by Make UK, have been banging their heads against the wall for years at the lack of a proper industrial strategy from government.

That is why we have launched our modern industrial strategy…

… to drive investment into the industries that will define our success in the years ahead.

We have already provided funding to unlock investment in sectors like aerospace, automotives and life sciences…

… and we have set out reforms to boost financial services, the AI sector and creative industries.

We are not wasting any time, and we will move forward with the next stages of the Industrial Strategy ahead of its publication in the Spring.

We will work with the private sector to deliver the infrastructure that our country desperately needs.

This includes the Lower Thames Crossing, which will improve connectivity at Port of Tilbury and Dover, London Gateway and Medway…

… alleviating severe congestion…

… as goods destined for export come from the North, and the Midlands and across the country to markets overseas.

To drive growth and deliver value for money for taxpayers, we are exploring options to privately finance this important project.

And we have changed course on public investment, too…

… with a new Investment Rule to ensure that we don’t just count the costs of investment – we count the benefits too.

We are now investing 2.6% of GDP on average over the next five years, compared to 1.9% planned by the previous government..

… delivering an additional £100 billion of growth-enhancing capital spending…

… which catalyses private sector investment…

… in more housing…

… better transport links…

… and clean energy.

These are significant steps in just six months…

… and we are seeing some encouraging signs in the British economy.

The IMF have upgraded our growth prospects for 2025…

… the only G7 country outside the US to see this happen.

This gives us the fastest growth of any major European economy this year.

And a global survey of CEOs by PWC, has shown Britain is now the second most attractive country in the world for businesses looking to invest.

The first time the UK has been in that position for 28 years.

This is all welcome news.

But there is still more that we can and will do.

I am not satisfied with the position we are in.

While we have huge amounts of potential, the structural problems in our economy run deep.

And the low growth of the last 14 years cannot just be turned around overnight.

This has to be our focus for the duration of the parliament.

Because the situation demands us to do more.

And today I will go further and faster in kickstarting economic growth.

Our mission to grow our economy is about raising living standards in every single part of the United Kingdom.

Manchester is home to the UK’s fastest growing tech sector.

Leeds is one of the largest financial services centres outside of London.

These great northern cities have so much potential and promise…

…which our brilliant metro mayors, Andy Burnham and Tracy Brabin, are working hard to realise…

… just like our other metro mayors are doing to deliver new opportunities in their areas.

And there is so much more that government can do to support our city regions.

To achieve this requires greater focus on two key areas: infrastructure and investment.

If we can improve connectivity between towns and cities across the North of England, we can unlock their true growth potential…

… by making it easier for people to live, travel and work across the area.

At the Budget, I set out funding for the Transpennine Route Upgrade…

… a multi-billion-pound programme of improvements that will connect towns and cities from Manchester to York via Stalybridge, Leeds and Huddersfield.

We are delivering railway schemes to improve journeys for people across the North…

… including upgrades at Bradford Forster Square and by electrifying the Wigan-Bolton line.

We have committed to supporting the delivery of a new mass transit system in West Yorkshire.

And in Spring, we will publish the Spending Review and a 10-Year Infrastructure Strategy…

… which will set out further detail of our plans for infrastructure right across the UK.

New transport infrastructure can also act as a catalyst for new housing.

We have already seen the benefits that unlocking untapped land around stations can deliver in places like Stockport…

… where joint work spearheaded by Andy Burnham and council leaders has delivered new housing and wider commercial opportunities.

We will introduce a new approach to planning decisions on land around stations, changing the default answer to yes.

We are working with the devolved governments to ensure the benefits of growth can be felt across Scotland, Wales and Northern Ireland…

… including by partnering with them on the Industrial Strategy to support their considerable sectoral strengths.

And in December, I met with Metro Mayors from across England.

They told me that more opportunities for investment are vital if their local economies are to grow in the years ahead.

We are listening closely to them.

As the Metro Mayor of Liverpool, Steve Rotherham, has called for…

… we will review the Green Book and how it is being used to provide objective, transparent advice on public investment across the country, including outside London and the Southeast.

This means that investment in all regions is given a fair hearing by the Treasury that I lead.

The Office for Investment is going to be working hand in hand with local areas…

… to develop a commercially attractive pipeline of investment opportunities for a global audience…

… starting with the Liverpool City Region and the North East Combined Authority, led by Kim McGuinness.

The National Wealth Fund is establishing strategic partnerships to provide deeper, more focused support for city regions, starting in Glasgow, West Yorkshire, the West Midlands, and Greater Manchester.

We are supporting key investment opportunities across the UK.

The government is backing Andy Burnham’s plans for the redevelopment of Old Trafford, which promises to create new housing and commercial development around a new stadium…

… to drive regeneration and growth in the area.

We are moving forward with the Wrexham and Flintshire Investment Zone…

… focusing on the area’s strengths in advanced manufacturing…

… backed by major businesses like Airbus and JCB…

… to leverage £1 billion of private investment in the next ten years…

… creating up to 6,000 jobs.

So I can announce today that we will work with Doncaster Council and the Mayor of South Yorkshire, Oliver Coppard…

… to support their efforts to recreate South Yorkshire Airport City as a thriving regional airport.

And finally, I am pleased to announce a partnership between Prologis and Manchester Airport Group in the East Midlands, where the Metro Mayor Claire Ward is doing an excellent job growing the local economy there.

Prologis and MAG will work together to build a new advanced manufacturing and logistics park at East Midlands Airport …

… unlocking up to £1 billion of investment and 2,000 jobs at the site…

… a major investment from a global business into our country…

… representing a huge vote of confidence in the East Midlands and in the UK.

This is just the start of our work to get more investment into every nation and region of Britain.

Next, I want to set out further detail for plans for the area we are in today.

Oxford and Cambridge offer huge potential for our nation’s growth prospects.

Only 66 miles apart…

… these cities are home to two of the best universities in the world…

… and the area is a hub for globally renowned science and technology firms.

This area has the potential to be Europe’s Silicon Valley.

To make that a reality, we need a systematic approach to attract businesses to come here and to grow here.

At the moment, it takes over two and a half hours to travel between Oxford and Cambridge by train.

There is no way to commute directly by rail from places like Bedford and Milton Keynes to Cambridge.

And there is a lack of affordable housing right across the region.

In other words, the demand is there…

… but there are far too many supply side constraints on economic growth here.

We are going to fix that.

The Ox Cam arc was initially launched in 2003 – over 20 years ago.

We are not prepared to miss out on the opportunities here any longer.

So working with the Deputy Prime Minister…

… who is already driving forward vital work in the region…

… we are going further and faster to unlock the potential of the Oxford-Cambridge Growth Corridor.

First, we are funding the transport links needed to make the Oxford Cambridge growth corridor a success…

… including East-West Rail, with new services between Oxford and Milton Keynes starting this year…

… and road upgrades to reduce journey times between Milton Keynes and Cambridge.

East West Rail will also support vibrant new and expanded communities along the route.

We have already received proposals for New Towns along the new railway…

… with 18 submissions for sizeable new developments.

At Tempsford – the nexus of the East Coast Mainline, the A1 and East West Rail…

…we will move quicker to deliver a mainline station, meaning journey times to London of under an hour…

… and to Cambridge in under 30 minutes when East West Rail is operational.

Second, we are ensuring that the area has the right infrastructure and public services in place to support the growth corridor as it expands.

A new Cambridge Cancer Research Hospital is being prioritised for investment as part of wave 1 of the New Hospital Programme.

Water infrastructure has also been a major hindrance to development.

So we have now agreed water resources management plans, unlocking £7.9 billion of investment in the next 5 years…

…including plans for the new Fens Reservoir serving Cambridge and the South East Strategic Reservoir near Oxford.

And I can confirm today that the Environment Agency have now lifted their objections to new development in Cambridge, following this government’s intervention to address water scarcity…

… which means 4,500 additional homes, new schools, and new office, retail and laboratory space can be built.

Third, I am delighted that Cambridge University have come forward with plans for a new flagship innovation hub at the centre of Cambridge…

… to attract global investment and foster a community that catalyses innovation, as other cities around the world like Boston and Paris have done.

Just yesterday, Moderna completed the build for their new vaccine production and R&D site in Harwell, right here in Oxfordshire, alongside a commitment to invest a further £1 billion in the UK.

And we are creating a new AI Growth Zone in Culham to speed up planning approvals for the rapid build-out of data centres.

And finally, to take this project forward at real pace…

… and catalyse private sector investment into the region…

… I am pleased to announce that the Deputy Prime Minister and I have asked Lord Patrick Vallance to be the champion for the Oxford Cambridge Growth Corridor.

Lord Vallance has extensive experience across the sciences, academia, and government.

He will work with local leaders and with the Housing and Planning Minister to deliver this exciting project…

… including with Peter Freeman, who is already doing excellent work in Cambridge…

… and a new Growth Commission for Oxford, which will help to accelerate growth in the city and its surrounding area.

This is the government’s modern Industrial Strategy in action.

With central government, local leaders and business working together…

… the Oxford and Cambridge Growth Corridor could add up to £78 billion to the UK economy by 2035 …

… driving investment, innovation and growth.

Finally, I come to the decision that perhaps more than any other…

… has been delayed…

… has been avoided…

… has been ducked.

The question of whether to give Heathrow …

… our only hub airport…

… a third runway…

… has run on for decades.

The last full length runway in Britain was built in the 1940s.

No progress in eighty years.

Why is this so damaging?

It’s because Heathrow is at the heart of the UK’s openness as a country.

It connects us to emerging markets all over the world, opening up new opportunities for growth.

Around three-quarters of all long-haul flights in the UK go from Heathrow.

Over 60% of UK air freight comes through Heathrow.

And about 15 million business travellers used Heathrow in 2023.

But for decades, its growth has been constrained.

Successive studies have shown that this really matters for our economy.

According to the most recent study from Frontier Economics, a third runway could increase potential GDP by 0.43% by 2050.

Over half – 60% of that boost, would go to areas outside London and the South-East.

… increasing trade opportunities for products like Scotch whiskey and Scottish salmon – already two of the biggest British exports out of Heathrow.

And a third runway could create over 100,000 jobs.

For international investors, persistent delays have cast doubt about our seriousness towards improving our economic prospects.

Business groups, like the CBI, the Federation of Small Businesses and the Chambers of Commerce right across the UK…

…as well trade unions like GMB and Unite are clear…

… a third runway is badly needed.

In 2018, the previous government steered its Airports National Policy Statement through parliament.

But no action was taken.

It simply sat on the shelf.

We are taking a totally different approach to airport expansion.

This Government has already given its support to expansion at City Airport and at Stansted.

And there are two live decisions on Luton and Gatwick which will be made by the Transport Secretary shortly.

But as our only hub airport, Heathrow is in a unique position – and we cannot duck the decision any longer.

I have always been clear that a third runway at Heathrow would unlock further growth…

… boost investment…

… increase exports…

… and make the UK more open and more connected.

And now, the case is stronger than ever…

… because our reforms to the economy…

… like speeding up the planning system…

… and our plans for modernised UK airspace…

… mean the delivery of this project is set up for success.

So I can confirm today that this Government supports a third runway at Heathrow…

… and is inviting proposals to be brought forward by the summer.

We will then take forward a full assessment through the Airport National Policy Statement.

That will ensure that the project is value for money – and our clear expectation is that any associated surface transport costs will be financed through private funding.

And it will ensure that a third runway is delivered in line with our legal, environmental and climate obligations.

Heathrow themselves are clear that their proposal for expansion will meet strict rules on noise, air quality and carbon emissions.

And we are already making great strides in transitioning to cleaner and greener aviation.

Sustainable Aviation Fuel reduces CO2 emissions compared to fossil fuel by around 70%.

At the start of this month, the Sustainable Aviation Fuel mandate became law.

And today I can announce that we are investing £63 million into the Advanced Fuels Fund over the next year…

… and we have today set out the details of how we will deliver a Revenue Certainty Mechanism to encourage investment into this growing industry.

These measures will encourage more investors to back production in the UK, bringing good, high-skilled jobs to areas like Teesside…

… demonstrating that investment in the right technology can help us deliver both our growth and our clean energy missions.

Now is the moment to grasp the opportunity in front of us.

By backing a third runway at Heathrow, we can make Britain the world’s best connected place to do business.

That is what it takes to make bold decisions in the national interest.

That is what I mean by going further and faster to kickstart economic growth.

The work of change has begun.

We have already made great progress.

But I am not satisfied.

And I know that there is more to be done.

We must go further and faster if we are to build a brighter future.

The prize on offer is immense.

The next generation with more opportunities than the last.

An engineer in Teesside, working in some of the most exciting industries of the future – from carbon capture to sustainable aviation fuel.

A scientist in Milton Keynes or Bedford, working in our life sciences industry to solve some of the most important medical challenges in the world.

A small business owner in Scotland, knowing that they can expand and export to new markets right across the globe.

Wealth created, and wealth shared, in every part of Britain.

This is a Government on the side of working people.

Taking the right decisions to secure their future, to secure our future.

Stepping up to the challenges we face.

Ending the era of low expectations.

Putting Britain on a different path.

Delivering for the British people.

And I am determined, this Government is determined, to do just that.

Thank you.

The speech made by Rachel Reeves, the Chancellor of the Exchequer, at the Mansion House in London on 14 November 2024.

Lord Mayor, Governor, Ladies and Gentlemen.

It’s an honour to be here with you this evening.

Thank you to the City of London Corporation for hosting us.

It is a privilege to follow the Lord Mayor’s address…

… and to give my first Mansion House speech.

As the Lord Mayor said, there are so many reasons to be optimistic about our country…

… and I absolutely share his ambition for our potential.

The potential of our financial services sector.

The potential we have to make Britain more competitive.

And critically, the potential that we have to grow our economy.

That is why…

… both in opposition and now in government…

… improving economic growth has been at the very heart of everything that I am seeking to achieve.

In my Mais lecture earlier this year…

… I set out my view that we are in a moment of flux…

… and a new approach was required to build secure and sustainable growth…

… on the platform of stability, investment and reform.

When I arrived at the Treasury just over four months ago…

… I said on day one that economic growth was now our national mission…

… as I set out plans to tackle some of the longstanding issues in the supply-side of our economy.

And two weeks ago, I delivered my first budget as Chancellor of the Exchequer.

It was a once in a parliament budget to wipe the slate clean.

It was a budget that tackled two elements in our plan for economic growth.

First, it provided economic stability…

… by putting our public finances back on a firm footing.

That required difficult choices.

On spending, on welfare, and on tax.

But by making those tough choices now…

… we are providing stability for the long-term.

Because instability in our public finances leads to instability in our financial markets.

That is not good for investment.

That is not good for growth.

And it is not good for business.

So by drawing a line under instability…

… business can now plan for the future.

And we have provided stability for our public services too…

… which now deliver within the spending envelope that they have been set…

… and through reform, they must live within their means.

The second step that we took to improve economic growth at the budget…

… was to change course on public investment.

Public investment was set to fall by nearly 1% of GDP under the plans that I inherited.

That would have held back our growth potential for many years to come.

As the International Monetary Fund have set out…

… low levels of public investment have been a major contributing factor to the UK’s weak growth performance…

… not least, because it makes it harder to catalyse the private investment that we so badly need.

Now, as a result of the measures that we have taken…

… public investment will be £100bn higher over the next five years…

… creating jobs…

… and driving growth and opportunity across the United Kingdom.

This will be delivered alongside a series of vital guardrails…

… to ensure that spending delivers the very best value-for-money…

… provides returns for taxpayers…

… catalyses private investment…

… and significantly boosts growth and productivity.

Because of the steps that we took…

… the Office of Budget Responsibility have set out that, in the long-term…

… our policies would permanently increase the supply capacity of our economy.

But that does not represent the height of my ambition.

I know that we can do more…

… to go further and faster in realising our growth potential.

So that is why economic growth will continue to be the central mission in the weeks, months and years ahead.

Having focused on economic stability and public investment in the budget…

… tonight I will set out the steps that we are taking …

…to drive growth across the other key areas that have long been my priority.

Increasing private investment.

And reforming our economy.

Let me begin with our plans to increase investment.

More investment is how we spur innovation and growth.

It is how we boost the efficiency and the capacity of our economy.

And it is how we create the new opportunities and high-skilled jobs in every part of our country.

Today, I am focusing on how we continue to attract investment across the world.

And how we increase private investment…

… by working in partnership with business…

… and specifically, with the financial services sector.

Before entering politics, I worked as an economist at the Bank of England.

And then in financial services.

Before we came into government…

… I was clear that financial services must play a central part in our economic vision…

… and our plans for economic growth.

Because I know that this sector is the crown jewel in our economy.

It employs 1.2m people, from London to Edinburgh, and from Manchester to Belfast.

It is one of the country’s largest and most productive sectors, accounting for 9% of our economic output.

And it is a global success story, as the Lord Mayor has said: we are the second largest exporter of financial services in the G7.

But we cannot take the UK’s status as a global financial centre for granted.

In a highly competitive world…

… we need to earn that status…

… and we need to work to keep it.

I have been determined to do just that since becoming Chancellor.

Just one week into office, I welcomed the biggest changes to the UK’s listing regime in over three decades…

… to reform our capital markets…

… increasing the flexibility for firms and founders of British high growth companies…

… so we have more British success stories…

… like Raspberry PI and Applied Nutrition…

… IPO right here in the UK.

In our first month, we launched the landmark Pensions Review, and I will return to that later in my speech.

And in September, we announced the final stage of our post-crisis reforms to banks’ capital requirements…

… marking the end of the journey to ensure that banks are well-capitalised…

… working side by side with the Governor…

… strengthening the resilience of our banking system…

… whilst protecting banks’ ability to lend to small and medium enterprises…

… and also for infrastructure.

Now, we must build on the steps we’ve already taken.

In the Spring, we will publish the first ever Financial Services Growth and Competitiveness Strategy.

This will give the financial services sector the confidence it needs to invest.

Financial services is one of the eight growth sectors in our modern industrial strategy…

… recognising that, just as in other parts of the economy…

… we must constantly work to remove barriers to growth and investment.

This approach will ensure that we promote our strengths across the world.

And today, we are setting out the five, priority growth opportunities on which that strategy will focus…

… Fintech…

… sustainable finance…

… asset management and wholesale services…

… insurance and reinsurance…

… and capital markets.

And we will work in partnership with you…

… on the development of the strategy…

… ahead of its publication in the Spring…

… driven forward by our City Minister, Tulip Siddiq

By providing the basis of long-term stability for the sector…

… we are laying the foundations for more private investment.

The UK has the lowest levels of business investment in the G7 as a percentage of GDP.

In the Budget, we confirmed our plans to capitalise the flagship impact investor, the National Wealth Fund…

… to invest in the industries of the future…

… and catalyse over £70bn of private investment.

And in the last month alone, the National Wealth Fund has struck a number of deals…

… including funding to deliver full fibre broadband across the UK…

… and to support the building of new infrastructure in Wales.

The PRA, the Treasury and the National Wealth Fund will work together to crowd in investment by insurers…

… in productive assets…

… taking full advantage of the new Solvency UK regulatory regime.

That includes investment in clean energy projects.

I want London to be the place where the billions needed to finance the energy transition are financed…

… and we have already mobilised significant private capital through the International Investment Summit last month…

… including £4bn for the East Anglia 2 wind farm…

… and £2bn to build new solar farms in Essex, Yorkshire and Wiltshire.

This week, the Prime Minister welcomed the launch of the Climate Investment Fund Capital Market Mechanism on the London Stock Exchange.

Tonight we are building on these foundations to deliver a world-leading sustainable finance framework.

This will be built in partnership with industry…

… and we will be co-launching the Transition Finance Council alongside the City of London Corporation.

This presents a huge opportunity for the UK financial services sector…

… and I am determined that we win this race for global business.

Alongside our National Wealth Fund…

… we must ensure that there are a wide range of other vehicles to drive private investment.

Tonight, I want to focus on our plans in one of those key areas: pension funds.

Our pensions market is one of the largest in the world.

There will be £800bn of assets in workplace Defined Contribution schemes…

… and £500bn of assets in the local government pension scheme…

… by the end of this decade.

Pension funds will always play an important role in the gilt market…

… but for too long, pensions capital has not been used to support the development of British start-ups, scale-ups or to meet our infrastructure needs.

I have long been of the view that this hurts our economy…

… because our highest-potential businesses cannot expand…

… and savers are not seeing the returns on their investment which they deserve.

So I was pleased when the previous government, led by my predecessor as Chancellor…

… working with industry…

… took steps through the Mansion House Compact…

… to encourage more pension fund investment into productive assets.

I welcomed those reforms and we will take them forward…

… but now we need to go further.

That is why one of my first steps as Chancellor was to announce the Pensions Investment Review…

… led by our first ever joint Treasury and DWP Minister for Pensions, Emma Reynolds…

… who has worked with many of you over recent months.

Australian pension schemes invest around 3 times more in infrastructure investment compared to Defined Contribution schemes in the UK…

… and 10 times more in private equity, including in high growth businesses, compared to the UK.

One of the key reasons for this is the much larger size of their funds…

… while our pensions landscape remains highly fragmented.

That means many of our pension funds do not have the capacity to invest at the scale required.

And more often than not, it is Canadian teachers and Australian professors…

… reaping the rewards of investing in British productive assets through their pensions schemes…

… rather than British savers.

That’s not good enough…

… and we need to change that.

So tonight, we are publishing the interim report of the Pensions Investment Review.

It sets out our plans to create Canadian and Australian style-“megafunds” to power growth in our economy…

… and start the most significant set of changes to the pensions landscape since the Turner Review…

… underpinned by a clear commitment to legislate for these changes for the first time…

… in the Pension Scheme Bill next year.

We will deliver a significant consolidation of the Defined Contribution market…

… to enable schemes to deliver better saver outcomes…

… while investing to support growth.

And we will legislate on measures to consolidate the Local Government Pension Scheme…

… one of the largest pension schemes in the world…

… and require that the 86 Local Government Pension Scheme administering authorities consolidate all their assets into 8 pools.

These reforms will deliver real change in our economy.

Through consolidation of the DC market and Local Government Pension Schemes into megafunds…

… previous domestic and international experience suggests…

…that we could unlock around £80bn for investment in private equity, including exciting growth businesses…

… and in vital infrastructure projects including transport, energy and housing projects here in the UK.

We will take a more proactive approach to working with investors to ensure that capital is directed to the UK’s biggest growth opportunities.

We are creating NISTA and we will publish a ten-year infrastructure strategy…

… to ensure that there is a pipeline of projects to attract that investment.

We have established a new pathfinder British Growth Partnership…

… to crowd-in institutional investment into venture capital funds and innovative businesses here in the UK.

This work is already making an impact.

I can confirm this evening that Aegon UK…

… will be a substantial cornerstone investor…

… and Natwest Cushon…

… and they have now agreed to work with the British Business Bank on the launch of the British Growth Partnership…

… with a view to making an investment in the initial fund.

The final area I want to focus on when it comes to investment is the importance of looking internationally.

Last month, with the support of many people in this room – including the Lord Mayor and Barclays, HSBC, Lloyds, and M&G – we hosted an International Investment Summit in London…

… where we saw £63bn of investment flow into the UK.

That shows the potential that we have to attract funding from across the world into our country.

But I want to be clear-eyed about the context in which the UK…

… and its businesses…

… will be operating under in the years ahead.

We face geopolitical uncertainty.

There are other countries who are looking for the very same economic opportunities as we are.

And we face structural challenges too, including those which have come from Brexit.

It will not be straightforward to navigate all of these headwinds.

We should be honest about that.

But as we navigate them…

… I will be guided by a clear principle.

I will always do what is in our national interest…

… for our economy…

… for our businesses…

… and for the British people.

That means free and open trade…

… especially with our most economically important partners.

That includes the United States…

… our single most important destination for financial services trade…

… and there is so much potential for us to deepen our economic relationship on areas such as emerging technologies.

I look forward to working closely with President-Elect Trump, and his team, to strengthen our relationship in the years ahead.

And of course our biggest trading partner is the European Union.

We will not be reversing Brexit or re-entering the single market or customs union…

… but we must reset our relationship.

That will be my message when I attend the Eurogroup meeting of finance ministers in Brussels next month.

We must recognise that our markets are highly inter-connected…

… and ensure that on the economy and in financial services…

… our approach supports growth and delivers investment.

And where there are other important economic opportunities for the UK…

… including by engaging with significant and fast-growing economies like India, China and the Gulf states…

… we will look to realise those opportunities, too.

Alongside economic stability…

… and higher levels of investment…

… we need reform.

Supply-side reform has been a central part of our work in the last four months…

… through changes to our planning system to unlock housing and new infrastructure…

… policies to reduce economic inactivity, improve skills and bring people back into the workplace…

… and a focus on place-based measures to deliver growth right across the UK.

I know the Governor will have more to say on the topic of supply-side reform shortly.

Tonight, I want to build on the work we have done…

… which puts reform at the heart of this government’s agenda.

First, I am clear that this must include reform of our public services.

In the budget, I set out our future spending plans…

… to ensure that our public services have the investment that they need for the years ahead.

That additional investment comes with the clear expectation of better value for money…

… and higher productivity.

As the Secretary of State for Health said yesterday…

… taxpayers welcome the additional investment we put it into the NHS…

… but they worry it won’t be spent wisely.

So reform will be a central focus of the second phase of the Spending Review right across government.

We will use digital technology more effectively.

We will focus on prevention, to manage pressures in the system.

We will join-up services across government to increase efficiency and to bring costs down.

And we will harness the knowledge and expertise of business leaders as we do so…

… so that we can ensure that we bring the best ideas into government from beyond Whitehall, too.

Alongside this …

… we need economic reform to unlock the full potential growth potential of the British economy.

Our approach to regulation is a critical part of that.

As the Prime Minister has already set out, the key test for regulation is whether it will make our economy more dynamic and more competitive.

So we will review the strategic guidance that we give to the CMA and to other major regulators…

… to underline the importance of growth.

That includes our financial service regulators.

It was right that successive governments made regulatory changes after the Global Financial Crisis…

… to ensure that regulation kept pace with the global economy of the time…

… but it is important that we learn the lessons of the past.

These changes have resulted in a system which sought to eliminate risk taking.

That has gone too far…

… and, in places, it has had unintended consequences that we must now address.

Let me set out some examples.

First, while the Senior Managers and Certification Regime has helped to improve standards and accountability…

… some elements of it have become overly costly and administratively burdensome.

So the Treasury, the FCA and the PRA will shortly publish the outcomes of our review…

… including a commitment to consult on removing the current Certification Regime from legislation.

Second, as the PRA have acknowledged…

… post-crisis pay structures made the UK an international outlier on deferral arrangements…

… so we will support their intention to consult on reducing the length of pay deferrals…

… helping firms to attract and retain talent.

Third, some of our regulatory requirements are duplicative, and they could be streamlined…

… so I look forward to seeing the outcomes of the FCA’s Handbook Review…

…which can free up resources for businesses to innovate and to grow.

And finally, while regulation has been successful in improving the quality of financial advice being offered to consumers…

… many people do not get the help with their finances that they want and need…

… so the FCA will shortly consult on transformational changes to financial advice and guidance…

… to ensure that people get the right support.

As these examples show…

…the UK has been regulating for risk, but not regulating for growth.

So while maintaining important consumer protections…

… upholding international standards of regulation…

… and protecting the vital stability of our financial services system…

… now is also the moment to rebalance our approach….

… and take forward the next stage of reforms needed to drive growth, competitiveness and investment.

The last government introduced legislation to make growth and competitiveness secondary objectives for our regulators…

… which we supported in opposition.

Tonight I can announce that we have issued new growth-focused remit letters to the Financial Conduct Authority…

… Prudential Regulation Committee…

… Monetary Policy Committee..

… Financial Policy Committee…

… and the Payment Systems Regulator.

These make clear that I expect them to fully support this government’s ambitions on economic growth.

I welcome the work that the FCA and PRA have already started…

… and I look forward to seeing their next steps to deliver that growth and competitiveness.

I have also heard from many of you that our approach to redress can cause uncertainty..

… and be a drag on investment.

The Financial Ombudsman Service plays a vital role for consumers to get redress when things have gone wrong, and that will not change.

But reform is needed to create a surer climate for investment.

So we have worked closely with the FCA and the Ombudsman to develop a new agreement between the two institutions…

… with clearer expectations on how they cooperate…

… including on historic market practice and mass redress events.

And I strongly welcome their joint Call for Input, to be published tomorrow…

… which seeks to significantly improve the rules governing how the Service operates.

Alongside these measures…

… we are tonight setting out a range of further steps…

… to build a true partnership between government and the financial services sector…

… and unlock its potential.

Let me take you through them.

Because reforming capital markets is a priority for this government…

… we are today committing to legislate to establish PISCES…

… an innovative new stock market…

… by May 2025…

… to support companies to scale and grow.

We are supporting innovation in the financial services sector…

… by launching a pilot to deliver a Digital Gilt Instrument…

… referred to as DIGIT…

… using distributed ledger technology.

Insurance markets are also pivotal in supporting growth.

So we are today publishing a consultation on captive insurance…

… where a new approach could cement the UK’s position as a leading financial services centre.

And alongside the regulators’ continued efforts, we will consider further steps to improve the UK’s Insurance Linked Securities offer.

To protect the integrity of the financial services sector…

… we are working with tech platforms and telco networks to reduce the scale of incidence and losses from fraud.

To empower female entrepreneurs and support women in business…

… we are backing the ambitious work of the Invest in Women taskforce, led by Debbie Wosskow and Hannah Bernard…

… delivered alongside our Women in Finance Charter – led by Dame Amanda Blanc – which continues to go from strength to strength.

To support the mutual sector…

… we are launching our call for evidence on the credit union ‘common bond’…

… and asking regulators to report on the mutuals landscape.

And I welcome the work of Nationwide, Co-operative Group, Arla and Royal London to establish an industry-led Mutuals Council to drive growth in the sector.

And finally, we are publishing our National Payments Vision…

… including decisive action to progress Open Banking…

… and support our fintech businesses.

Lord Mayor, Governor, Ladies and Gentlemen.

In the budget, two weeks ago…

… we fixed the foundations…

… and restored stability to our public finances.

The precondition for a strong and successful economy.

The changes that I have set out this evening will drive growth and competitiveness…

… through investment and through reform.

A long-term strategy to harness the strengths of our financial services sector.

Making the UK a global leader in sustainable finance.

Reducing uncertainty by developing the right approach to redress.

Reinvigorating our capital markets by unlocking private investment through our pension funds.

And reforming our approach to regulation to make it more dynamic and the sector more competitive.

Taken together, these measures represent the most pro-growth financial services package since the financial crisis.

Because we cannot rest on our laurels.

Where we have strengths…

… we must build on them.

Where we have weaknesses…

… we must address them.

And in everything we do, we will work together…

… with you …

… in partnership.

Because that is what our country needs to prosper and to grow.

Thank you very much.