The comments made by Rishi Sunak, the Chancellor of the Exchequer, on 30 September 2021.
Everyone should be able to afford the essentials, and we are committed to ensuring that is the case.
Our new Household Support Fund will provide a lifeline for those at risk of struggling to keep up with their bills over the winter, adding to the support the government is already providing to help people with the cost of living.
The comments made by Rishi Sunak, the Chancellor of the Exchequer, on 30 September 2021.
I am immensely proud of the furlough scheme, and even more proud of UK workers and businesses whose resolve has seen us through an immensely difficult time. With the recovery well underway, and more than 1 million job vacancies, now is the right time for the scheme to draw to a close.
But that in no way means the end of our support. Our Plan for Jobs is helping people into work and making sure they have the skills needed for the jobs of the future.
The comments made by Rishi Sunak, the Chancellor of the Exchequer, on 3 August 2021.
I’m thrilled that apprentices and employers in freelance industries such as film and TV can start to benefit from our new flexi-job apprenticeship scheme as part of our Plan for Jobs.
Together, we’re creating exciting new opportunities for apprentices and employers – harnessing the skill and talent of today for the jobs of tomorrow.
The statement made by Rishi Sunak, the Chancellor of the Exchequer, in the House of Commons on 6 July 2021.
In accordance with the charter for budget responsibility, the OBR has today published its third fiscal risks report (FRR). FRR 2021 provides an update on the risks identified in previous reports, alongside focused coverage of three areas of fiscal risk: the coronavirus pandemic, climate change, and the cost of Government debt. I am grateful to the Budget Responsibility Committee, and staff of the OBR, for their work in preparing this report, which ensures that the UK continues to be at the forefront of fiscal transparency and management during these unprecedented times. The report was laid before Parliament earlier today and copies are available in the Vote Office. The Government will respond formally to FRR 2021 within the next year.
The UK has experienced two “once-in-a-generation” economic shocks in just over a decade, and the challenges faced by the UK since the start of the pandemic have been substantial. Action taken over the last decade to restore the public finances to health enabled the Government to fund a comprehensive package of support for the economy when most needed. The report notes that our direct support to businesses helped keep many of our employers afloat, kept insolvencies in check and avoided the kind of credit crunch that occurred during the financial crisis. The Government have acted on a scale unmatched in recent history to protect people’s jobs and livelihoods and to support businesses and public services across the UK. Taking into account the significant support confirmed at spending review 2020 and Budget 2021, total announced support for the economy in response to covid-19 is £352 billion across 2020-21 and 2021-22.
The report highlights the range of spending choices and risks we face, particularly relating to pandemic spending. These will be considered at the spending review. As the report notes, spending is increasing in cash terms, real terms, and as a share of GDP overall. Total managed expenditure is forecast to rise by 2.1% of GDP between 2019-20 and 2024-25. Core departmental spending is set to grow at an average of over 3% in real terms over this Parliament. Our plans will deliver the largest real-terms increase in departmental spending for any full Parliament this century.
It is clear that unmitigated climate change is another significant fiscal risk and decarbonisation is essential for sustainable long-term growth and therefore also for the health of the public finances. The fiscal consequences of transition to net zero will need to be managed in line with the Government’s broader fiscal strategy. The Government will publish our net zero strategy later this year, which will set out more detail on how we will meet our net zero target.
The pandemic and the Government’s necessary policy response has led to an unprecedented increase in Government borrowing and debt; FRR 2021 illustrates how this has made the public finances more sensitive to changes in interest rates. While borrowing costs are affordable now, interest rates and inflation may not stay low forever. The OBR’s latest forecast recognises that the Government’s current fiscal plans deliver a stable medium-term outlook for public sector net debt, but as I set out at that Budget, we need to pay close attention to the affordability of that debt.
The risks discussed by the OBR in this report underline the importance of returning our public finances to a more sustainable path. The report finds that, in the face of many potential fiscal risks,
“fiscal space may be the single most valuable risk management tool”.
That is why the Government set out at Budget 2021 a plan for returning the public finances to a more sustainable path. It is vital that we rebuild fiscal space to ensure that the Government can maintain fiscal resilience to respond as future risks materialise, continue to invest in excellent public services and give businesses and citizens across the UK the certainty that comes with knowing we can and will support them.
The statement made by Rishi Sunak, the Chancellor of the Exchequer, in the House of Commons on 17 June 2021.
The UK Infrastructure Bank has begun operating in an interim form and is open for business.
The bank, owned and backed by the taxpayer, will support and enable private and public investment in infrastructure, with core objectives to help tackle climate change, particularly meeting our net zero emissions target by 2050, and to support regional and local economic growth. The Government and the bank have also set out the institution’s investment principles today which will guide how it delivers its objectives.
HM Treasury and the UK Infrastructure Bank have entered into a keep well agreement to ensure that the bank has sufficient funds to be able to meet its payment obligations in full as they fall due.
The UKIB will be headquartered in Leeds, and will operate across the whole of the UK, supporting projects in England, Scotland, Wales and Northern Ireland. Over the coming months, the bank will continue to build its capability and capacity as it establishes itself as an independent institution.
The Government are also publishing the bank’s initial framework document, which sets out the institution’s relationship to the Government.
A copy of the framework document, alongside an unexecuted copy of the “Keep Well Agreement”, which has information redacted on the basis that it contains either commercially sensitive or personal data, will be placed in the Library of the House.
The comments made by Rishi Sunak, the Chancellor of the Exchequer, on 3 June 2021.
Today’s data is another welcome sign that our Plan for Jobs is working and that the route we have taken is the right one.
These figures show the scheme is naturally winding down as people get back to work and take advantage of the opportunities out there in the jobs market.
We’ll continue to support those who need it through to September but I am hopeful that we’ll see more people moving back in to work as we continue on the road to recovery.
The statement made by Rishi Sunak, the Chancellor of the Exchequer, in the House of Commons on 26 April 2021.
Innovation is at the forefront of our vision for the future of UK financial services. The Government are committed to ensuring that the UK remains at the global cutting edge of technology and innovation in financial services. Creating the conditions needed for our FinTech businesses to grow and compete, both here and abroad, is central to delivering on this ambition. This is why, at Budget 2020, I asked Ron Kalifa OBE to carry out an independent review of the UK FinTech sector.
The Kalifa review of UK Fintech (the Review) [1] was published on 26 February 2021. It made a number of recommendations aimed at Government, regulators, and industry across five areas: policy and regulation, skills and talent, investment, international attractiveness and competitiveness, and national connectivity. At publication, HM Treasury welcomed the review and highlighted key recommendations including:
A Centre for Finance, Innovation and Technology to strengthen national co-ordination across the FinTech ecosystem to boost growth.
A regulatory “scale-box” to provide additional support to growth stage FinTech.
Amendments to UK listings rules to make the UK a more attractive location for initial public offerings (IPOs).
Improvements to tech visas to attract global talent and boost the FinTech workforce.
Here we have set out the actions that Government and regulators are taking in response to the review’s recommendations.
Centre for Finance, Innovation and Technology
The Government recognise the potential for a private sector-led Centre for Finance, Innovation and Technology (CFIT) as an accelerator for FinTech sector growth. It can achieve this through research, thought leadership, and working with regional FinTech hubs and national FinTech bodies to identify and address barriers to growth to the benefit of the sector across the whole of the UK. I have confirmed that the Government support the creation of this centre and will work closely with the FinTech community to make it a reality.
Regulatory scale-box
The Financial Conduct Authority (FCA) has also welcomed the Kalifa review and has set out steps it will be taking to deliver against the review’s idea for a “regulatory scale-box”, by enhancing its existing regulatory toolkit. These actions include:
Launching “Always Open” to make the regulatory sandbox available on a rolling basis.
Clarifying the scope of qualifying propositions for the regulatory sandbox to ensure as many firms as possible are able to access support.
Launching, in conjunction with the City of London Corporation, the second phase of the Digital Sandbox pilot, inviting applications to test proof of concepts to solve sustainability and climate change financial challenges.
Considering how to provide a “one-stop shop” for growth-stage firms to dock in and easily navigate what sources of FCA support are available to them.
Working with industry over coming months to identify further solutions for supporting firms manage the journey to scale.
The FCA has also announced plans to create a regulatory “nursery” for enhanced oversight of newly authorised firms, enabling an opportunity for additional support as firms become used to the requirements of regulatory compliance.
Listings regime
The Lord Hill Listings review, which was published at Budget 2021 and made recommendations to boost the UK as a destination for IPOs and optimise the capital raising process on UK markets, addresses a number of the Kalifa review’s recommendations for attracting more FinTech listings to the UK. The Government set out details of their response to Lord Hill’s review in a written ministerial statement on 19 April. In parallel, the FCA plans to consult on issues raised by the Kalifa review including reducing the minimum “free float” a company must have when it lists, and whether premium listed companies can have dual share class structures.
Scale-up visa
The Government demonstrated their support for attracting international talent to the UK at Budget 2021 by announcing creation of a “scale-up visa stream”. The new stream will be created within a new elite points-based route that will allow employees with a job offer at the required skills level from a recognised UK scale up, including FinTechs, to qualify for a fast-track visa, without the need for sponsorship or third-party endorsement. The Government will set out further details by July and the new route will be implemented by March 2022.
International competitiveness
The Department for International Trade (DIT) has announced it will create two new FinTech initiatives in response to the review. The first is a new FinTech cohort within DIT’s Export Academy initiative. This will provide bespoke, 1-2-1 advice to eligible UK FinTechs who are ready to scale into key markets such as North America, Hong Kong, and Singapore. Tailored advice will cover topics such as legal, tax, regulation, accounting, and market entry matters, all of which will support the international expansion ambitions of FinTechs on the programme. This is in addition to the wide range of existing DIT export support services currently available for UK businesses. DIT will also establish a FinTech champions scheme, comprising of leading UK FinTech advocates who are successfully exporting. DIT FinTech champions will fly the flag for UK FinTech overseas and support the next generation of UK FinTech in their growth journeys through mentoring and peer to peer learning. Both initiatives will enhance UK FinTech overseas, further elevating the UK’s status as a world leading FinTech hub.
Regulation for digital finance
The review also made recommendations more broadly for the Government to develop a regulatory framework for digitalisation and emerging technology in financial services. The Government are taking forward a number of initiatives in these areas:
Along with the Bank of England, HM Treasury has launched a Central Bank Digital Currency (CBDC) Taskforce to co-ordinate the exploration of a potential UK CBDC—the Government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK. A CBDC would be a new form of money that would exist alongside cash and bank deposits, rather than replacing them; the Government recognise that cash remains important to millions of people across the UK, and have committed to legislating to protect access to cash.
HM Treasury and the Bank of England are launching a CBDC Engagement Forum to gather strategic input on all non-technology aspects of CBDC.
The Bank of England is also launching a CBDC Technology Forum to gather input on all technology aspects of CBDC.
The Bank of England has launched a new account type that will allow access to central bank money by innovative financial market infrastructure providers to allow them to provide enhanced wholesale payment and settlement.
The Government have announced a financial market infrastructure (FMI) sandbox for firms exploring how to use technologies, such as distributed ledger technology (DLT), to innovate in the settlement of financial securities. This regime will aim to support firms, which are developing this new technology, with a more flexible and tailored approach to meeting requirements in current legislation, while appropriately balancing any risks to financial stability, market integrity and consumer protection. This new regime will be inspired by the FCA’s sandbox and HM Treasury will work together with the Bank of England and the FCA to deliver this.
In 2020 the Government committed to creating a framework of standards, governance, and legislation to enable a UK digital identity market. The Department for Digital, Culture, Media, and Sport (DCMS) published a draft trust framework for consultation in February this year which sets out the Government’s vision for the rules governing the future use of digital identities. A next iteration is expected to be published this summer.
The Department for Business, Energy, and Industrial Strategy is taking forward work on smart data and has committed to bringing forward legislation to better enable data sharing across sectors, including open finance. The FCA published a call for input on open finance in 2019 and published a feedback statement in March this year. This set out that the FCA will work closely with the Government as it takes forward the work on legislation as well as assessing the regulatory framework that would be needed to support open finance.
Tax
The review also highlighted the benefits of tax incentive schemes in supporting FinTech growth and at Budget 2021 the Government announced steps it is taking to ensure the schemes work as efficiently as possible, including:
A call for evidence on the enterprise management incentive scheme to seek views on whether the scheme is meeting its objectives, and examine whether more companies should be able to access the scheme.
A review of R&D tax reliefs which follows the consultation last year on expanding the qualifying expenditures to include cloud computing and data.
The Kalifa review also makes various recommendations that Government consider industry is best placed to take forward and I am grateful to Ron Kalifa for bringing these to my attention.
I would like to conclude by thanking Ron Kalifa and his team for their exceptional work in producing this seminal review. Ron has succeeded in producing insightful analysis, and garnering widespread support from industry for a suite of proposals that keep us on track for the continued success of UK FinTech.
I look forward to taking forward the steps I have outlined today.
The statement made by Rishi Sunak, the Chancellor of the Exchequer, in the House of Commons on 19 April 2021.
In November last year, I asked Lord Hill of Oareford CBE to carry out an independent review of the UK’s listing arrangements. Strong public markets are a vital component of the UK economy and the Government are committed to ensuring that the UK’s markets are as competitive as possible, and to supporting the many different companies that use markets to raise capital, including technology firms as mentioned in Lord Hill’s report.
At Budget last month, Lord Hill published his UK listing review1. It made 14 recommendations. Today, I am pleased to set out how the Government intend to take forward each of the recommendations made.
Seven of the recommendations are directed towards the Financial Conduct Authority (FCA), our independent regulator. As the FCA set out in its public response on 3 March, it welcomes the report and intends to consider all the relevant recommendations carefully, including on free float, dual class share structures, and special purpose acquisition companies (SPACs). It has committed to acting quickly where appropriate, including by publishing a consultation by the summer, and a specific consultation on SPACs before that.
Six key recommendations are directed towards HM Treasury (HMT), and I outline how we will be taking forward each recommendation, in turn, below.
First, I agree to present an annual “State of the City” report to Parliament (recommendation 1). I am grateful for the suggestions provided as to what this report could cover, and I believe this would benefit the UK’s capital markets. I will present the first of these reports in 2022.
Lord Hill recommended that HMT considers an additional “growth” or “competitiveness” objective for the FCA, as part of the future regulatory framework (FRF) review (recommendation 2). The first consultation on the FRF review closed on 19 February. This review seeks to ensure the UK’s regulatory framework is fit for our future outside the EU and the first consultation welcomed stakeholder views on the current set of statutory objectives. It also sought views on the future overall accountability framework for the FCA (and PRA). The Government are currently considering the 120 stakeholder responses received in relation to this consultation and will use these to inform a second consultation later this year. I will carefully consider this recommendation as part of that process.
Three of the recommendations, on reviewing the UK’s prospectus regime (recommendation 7), considering whether prospectuses drawn up under other jurisdictions’ rules can be used to facilitate secondary listings in the UK (recommendation 8) and facilitating the provision of forward-looking information by issuers in prospectuses (recommendation 9), all deal with the UK’s prospectus regime. Again, I strongly welcome this, and agree we need to consider reforms to ensure these documents are fit for purpose. I can confirm that the Government will bring forward a public consultation on the UK’s prospectus regime later this year.
Lord Hill also raised the issue of improving the efficiency of further capital raising by listed companies (recommendation 13). This is a highly technical area, and I agree that bringing together expertise specifically on this issue will be helpful to consider what more can be done to improve capital raising processes and I am happy to help convene such a group. My officials will be considering what form this will take over the coming weeks.
One of the recommendations, concerning how technology can be used to improve retail investor involvement in corporate actions and their undertaking of an appropriate stewardship role, is directed towards the Department for Business, Energy and Industrial Strategy (BEIS). As such, this recommendation will be taken forward by BEIS as part of its wider consideration of the findings from the Law Commission’s recent scoping study on intermediated securities. BEIS expects to announce a response to the study later this year.
Finally, Lord Hill concluded by drawing the Government’s attention to other issues raised with the review illustrating how the wider financial ecosystem may impact UK listings. I would like to thank Lord Hill for bringing these issues to my attention.
I would like to conclude by again thanking Lord Hill for his work, and I look forward to taking forward his recommendations.
The letter sent from Rishi Sunak, the Chancellor of the Exchequer, to Anneliese Dodds, the Shadow Chancellor of the Exchequer, on 8 April 2021.
Dear Anneliese,
Greensill Capital
Thank you for your letters of 21 March and 4 April regarding Greensill Capital.
In your first letter you ask about meetings HM Treasury held with Greensill Capital in 2020. As outlined in Freedom of Information releases already made public by HM Treasury, Greensill Capital approached HM Treasury officials regarding access to the Covid Corporate Finance Facility (CCFF) administered by the Bank of England.
These meetings covered requests made by Greensill Capital to, first, allow them to access the scheme by changing its terms and, second, to broaden its scope to allow supply chain finance (SCF) providers to access the scheme in general, emphasising the potential of this extension in ensuring the continued flow of capital to UK SMEs.
As is a matter of public record both of these requests were rejected but it is right that HM Treasury listened to – and gave due consideration to – all potential options to support businesses to survive the pandemic given the extraordinary challenges facing UK SMEs last Spring. As well as the discussions with Greensill Capital, HM Treasury launched a call for evidence and held discussions with several firms within the SCF sector. That consultation and the work of officials showed limited appetite from SCF providers for a scheme of this nature and that it would be challenging to target support towards UK SMEs.
In the same timeframe, in the interest of transparency, I can confirm that David Cameron reached out informally by telephone to me, and to the Economic Secretary and the Financial Secretary, on the matter of Greensill Capital’s access to the CCFF. The matter was referred to the relevant officials and, following appropriate consultations as outlined in the previous requests, the request was turned down. During this process, this was communicated to Greensill Capital by officials and, in parallel, by me to David Cameron.
In your letters, you also asked about the process by which Greensill Capital were accredited as a lender under the Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the accreditation process for this scheme more broadly.
CLBILS was launched on 20 April 2020 to ensure lenders had the confidence to lend to larger businesses in need of financing to survive the pandemic, and provided an 80% guarantee to accredited lenders on eligible finance. The scheme mirrored closely the Coronavirus Business Interruption Loan Scheme (CBILS) which had been launched on 23 March 2020, reflecting feedback from industry stakeholders that a larger variant of CBILS was needed to support the delivery of finance to larger businesses, to support those businesses – and the jobs they provide – through the pandemic.
There is a robust accreditation process in place for lenders seeking to lend through the coronavirus business lending schemes. The criteria for accreditation were developed by the British Business Bank (BBB), an arms-length body of the Department for Business, Energy and Industrial Strategy (BEIS). These criteria include minimum requirements such as the ability to demonstrate a track record of lending to larger enterprises, provision of evidence-based forecasts, the ability to demonstrate that it has sufficient capital available to meet their lending forecasts, a viable business model, robust operations and systems, the proposed lending will not have unreasonable lender levied fees and interest, and that the lender has all the necessary regulations, licences, authorisations and permissions to operate the scheme. These criteria, which mirrored those in the former Enterprise Finance Guarantee scheme, were set in consultation with BEIS and HM Treasury with no input from other parties.
The accreditation process itself is run independently by the BBB. HM Treasury has no involvement in standard accreditation decisions. Greensill Capital was approved by the BBB in June last year to provide finance through CLBILS based on criteria noted above. HM Treasury had no role and was not involved in the CLBILS accreditation decision for Greensill Capital.
HM Treasury’s only role in the CLBILS process is where lenders are seeking further approval to make individual loans of more than £50 million. In order to lend at this level under CLBILS, lenders were required to complete an enhanced BBB accreditation process (the criteria for which were discussed with the Bank of England), which was generally restricted to lenders supervised by the Prudential Regulation Authority or equivalent and approved for internal risk-based modelling, as the government (and the regulators) have confidence in the oversight of these lenders and their track record of business lending at this scale. Once this additional accreditation process had been completed, if the BBB were prepared to accredit lenders to make loans over £50 million, they would consult with HM Treasury on providing that lender with the enhanced accreditation. Greensill Capital enquired about this process and were directed to the BBB. The BBB did not approach HM Treasury with a proposal to approve enhanced lending accreditation for Greensill Capital and as a matter of public record their individual loan limit remained at £50 million for the scheme.
You also asked about how many other non-bank lenders were accredited under CLBILS or will be accredited under the Recovery Loan Scheme (RLS). There were two (ThinCats and Mercedes-Benz Financial Services UK) accredited under CLBILS. Accreditation under RLS is still underway – we anticipate a range of non-bank lenders to participate, as was the case under CBILS where over 75 of the accredited lenders were non-bank lenders including Funding Circle and Whiteoak. It is not a requirement to be regulated by the financial regulators to lend under the schemes – this allows a wide diversity of lenders to become accredited under the scheme which is vital to ensure a broad range of choice for borrowers, enabling them to access the finance they need to survive and recover from the pandemic.
Further, you asked about investigations into Greensill Capital’s accreditation under CLBILS. All accredited lenders are subject to audit by the BBB to ensure their compliance with scheme rules. The BBB opened an investigation into Greensill Capital’s compliance with the terms of the scheme in October 2020 and informed HM Treasury of this on 9 October. That investigation is continuing, and the Guarantor’s obligations under the CLBILS guarantee are suspended on a precautionary basis, so it would not be appropriate for me to comment further on it at this time.
In your letter of 21 March, you also asked about how HM Treasury handles concerns regarding financial stability. HM Treasury officials continuously monitor risks across the financial sector and escalate their response where appropriate in coordination with the independent financial authorities – the Financial Conduct Authority, the Prudential Regulation Authority and the Bank of England – as well as relevant government departments.
Finally, you asked about the government’s approach to the Prompt Payment Code and certain supply chain finance contracts.
Under the Public Contract Regulations 2015, public bodies must include 30-day payment terms in new public sector contracts; and require that this payment term be passed down the supply chain. Where public sector invoices are not paid within 30 days and are not disputed, interest becomes liable as set out in the Late Payment of Commercial Debts (Interest) Act 1998.
Central government departments are committed to paying 90% of undisputed and valid invoices from SMEs within 5 days and 100% of all undisputed and valid invoices within 30 days. Departments are required to report their performance against these payment targets on a quarterly basis on GOV.UK. This goes further than the requirements of the Prompt Payment Code. In addition, since 1 September 2019, any organisation that bids for a central government contract in excess of £5 million a year needs to demonstrate it has effective payment systems in place to ensure a reliable supply chain.
On your questions regarding specific Greensill Capital contracts relating to pharmacies, given these are NHS contracts, the Department for Health and Social Care would be best placed to answer any questions you may have in relation to them.
I can assure you that decisions regarding our Covid schemes were designed to maximise the support available to British businesses whilst ensuring there were mechanisms in place to protect the interests of the taxpayers, and I hope this letter addresses your concerns.
Best wishes,
[signed]
RT HON RISHI SUNAK MP
The comments made by Rishi Sunak, the Chancellor of the Exchequer, on 31 March 2021.
The super-deduction is the biggest two-year business tax cut in modern British history – driving our economy by helping businesses to invest, grow and support our Plan for Jobs.
I urge firms across the UK to invest in our recovery by taking advantage of this great opportunity.