Tag: Treasury

The press release issued by HM Treasury on 11 January 2025.

Closer financial services links with China to support secure and resilient growth in UK as government’s number one mission.

• Lifting of market access barriers across areas such as agri-food, helping British business compete on level-playing field and grow exports.
• Pragmatic cooperation results in agreements worth £600 million to the UK economy over the next five years and sets course to deliver up to £1 billion.
• The UK continues to challenge China on areas of disagreement, with the Chancellor raising concerns over China’s support for Russia’s illegal war, domestic interference and sanctions against British parliamentarians.

Working people and businesses across the UK will feel the benefits of agreements worth £600 million to the British economy, as agreed in the 2025 UK-China Economic and Financial Dialogue (EFD).

Chancellor Rachel Reeves was hosted by Vice Premier He Lifeng in Beijing today, in support of a stable and balanced UK-China relationship. Both sides agreed to deeper cooperation across areas such as financial services, trade, investment, and the climate to support secure growth, while being frank and open on areas of disagreement.

Overall, this government’s reengagement with China sets us on course to deliver up to £1 billion of value for the UK economy.

Chancellor of the Exchequer Rachel Reeves said:

The agreements we’ve reached show that pragmatic cooperation between the world’s largest economies can help us boost economic growth for the benefit of working people – a priority of our Plan for Change.

More widely, today is a platform for respectful and consistent future relations with China. One where we can be frank and open on areas where we disagree, protecting our values and security interests, and finding opportunities for safe trade and investment.

Britain is a leading financial services partner for China. A range of financial services companies with a substantial presence in the market – HSBC, Standard Chartered, Prudential, Schroders, abdrn, Fidelity International and London Stock Exchange Group – accompanied the Chancellor as a business delegation on the trip. The granting of new licences and quota allocations for UK firms such as HSBC, Schroders, abrdn and Aspect Capital to enhance their business in China will further strengthen these ties.

Alongside this are initiatives to improve capital market connectivity – including a commitment to further enhance the UK-China Stock Connect and welcoming the launch of UK-China over-the-counter bond business – as well as initiatives on pensions, countering illicit finance and sustainable finance cooperation.

As part of this, China announced plans to issue an inaugural overseas sovereign green bond – to be used to finance environmentally sustainable projects – in London during 2025. The UK and China will also explore a Wealth Connect programme in recognition of the role asset management has to play in supporting growth. The agreements today in financial services will provide significant value to the UK economy over the next five years.

Both sides have committed to improving existing channels to discuss more sensitive issues, including the need to speak candidly about national and economic security. In her engagement, the Chancellor made clear UK concerns about imbalances in the Chinese economy, and both sides agreed to discuss industrial policy in support of a global level playing field.

The UK and China have agreed to further cooperation including through strengthening the existing UK-China clean energy partnership and committing to a dialogue on international development – to work together in tackling shared global challenges.

The lifting of barriers that restricted export to China across a range of goods and services will support UK exports and innovation, particularly in the agri-food sector where a package headlined by pork, wool, poultry, and pet food stands to boost UK trade with China and support new jobs. China has also agreed to continue to liberalise sectors that restrict foreign investment, such as education and culture, and support a level playing field and fair competition.

The EFD is also part of a wider programme making substantive progress in improving arrangements for UK exports and investors.  This is reflected in new agreements on vaccine approvals, fertilizer, whisky labelling, legal services, automotives and accountancy which set course for the EFD to unlock £1 billion of value for the UK economy.

In her meetings with Chinese government counterparts today, the Chancellor was clear on the importance of open channels on areas where we disagree. She urged China to cease its support for Russia’s defence industrial base, which is enabling Russia to maintain its illegal war against Ukraine.

In recognition that upholding national security is this government’s first duty, the Chancellor raised this government’s deep concerns over cases involving interference in our democracy and malicious cyber activity emanating from China. Reeves also raised the case of British National Jimmy Lai and raised UK concerns around the respect of protected rights and freedoms in Hong Kong.

She raised human rights, including in Xinjiang, and forced labour. The Chancellor made clear that China’s sanctions against Parliamentarians are completely unwarranted and unacceptable.

Looking ahead, regular dialogues and technical exchanges to progress pragmatic cooperation have been established. This includes further engagement at Ministerial and official level on trade, science and tech, intellectual property, customs, sports and creative industries.

Notes to editors

• A full list of outcomes from the 2025 UK-China Economic and Financial Dialogue can be found here.
• The boost to trade includes estimates from the Department for Business and Trade and industry. Further details on the methodology can be found here.

Stakeholder reaction

Sir Mark Tucker, HSBC Group Chairman said:

We welcome the fact that the UK China Economic and Financial Dialogue – and the Financial Services Summit – are taking place for the first time since 2019.

China is the world’s second largest economy, the world’s top goods exporter, second largest source of merchandise imports and the UK’s 4th largest trading partner. Deepening the UK-China partnership on trade, investment, finance, health, education and climate change amongst other priority areas, is vital to delivering growth, investment and high-quality jobs for both China and the UK.

Our focus is to continue contributing to that ambitious agenda and to a mutually beneficial programme of UK-China economic and financial co-operation going forward.

José Viñals, Group Chairman of Standard Chartered, said:

The UK-China Economic and Financial Dialogue is both valuable and important to us and our clients. As a UK-headquartered bank with a long history in China, we continue to see significant growth potential and opportunities to collaborate, as evidenced by the permission to trade China Treasury Bond Futures and receipt of our Type A Bond Underwriting licence. Looking ahead, we encourage further cooperation between our two markets and are enthusiastic about what we, and partner financial institutions, can do to help deliver impactful initiatives such as those in sustainable and transition finance.

Richard Oldfield, Group Chief Executive, Schroders, said:

China has long been an important strategic focus for Schroders; we have been committed to the market for more than 30 years having established our first office in Shanghai in 1994.

We are honoured to be supporting the UK-China Economic and Financial Dialogue, further underscoring our commitment to China.

Over the years, as the market has increasingly opened up, we have been a leader in developing a compelling active investment proposition in the region, grounded in strategic partnerships, supported by a hugely talented team and strong public markets and private assets capabilities.

More recently, we have started to manage money invested into Chinese renewable infrastructure, enabling our clients to meet their emissions targets through investing in high-quality clean generation in China. It is the largest renewables market in the world, and we are focused on enabling the transition from fossil to renewable generation.

Lord Sassoon, President of the China-Britain Business Council:

UK-China Economic and Financial Dialogues have had a significant impact on generating investment, jobs and profitable business for the UK over many years. The resumption of the EFD is welcomed by our members, both in financial and professional services, but also across the wider economy.

CBBC looks forward to hosting a roundtable in Shanghai tomorrow at which British businesses will share with the Chancellor what further market opening and other support they need to grow their business with China.

Miles Celic, CEO of TCUK:

This has been a constructive, practical and ambitious gathering. The British and Chinese financial and professional services industries have a clear and growing role to play in deepening trade and investment between our countries. In the process, we can help as both our societies adapt to ageing populations and move towards Net Zero.

Sir Douglas Flint, Chairman, abrdn;

The resumption of high-level ministerial engagement after a gap of five years has been hugely constructive to opening dialogue to explore and fulfil business opportunities for mutual benefit.

Jonathan Eckley, Agriculture and Horticulture Development Board (AHDB) Interim International Trade Development Director, said:

China is our biggest market for pig meat exports which offers significant opportunities for the UK. The re-listing of two UK sites in December to export to China was an incredibly positive end to 2024 and a great example of collaboration between many stakeholders including government departments, industry and AHDB.

The Economic and Financial Dialogue (EFD) illustrates the further strengthening of our trade relationship with China which we welcome, and we look forward to continuing working with government and industry to explore opportunities for our sectors in this important market.

Neil Willis, Cranswick PLC Director said:

The relisting of UK Pork establishments is a positive step forward and we welcome the effort made by the current UK Government in resolving the approval situation at our Norfolk facility. We look forward to continued collaboration and a proactive approach to safeguarding market access and ensuring uninterrupted trade relationships.

Alan Vallance, ICAEW Chief Executive, said:

I am proud and honoured to have attended the Financial Services Summit and I thank the organisers for their invitation to attend.

Professional and business services have been identified as a growth sector in the UK government’s industrial strategy, so we are delighted by the commitment to accountancy and look forward to working with the CICPA on mutual examination exemptions. Additionally, we’ll continue to work in partnership with our counterparts in China on common areas, like accountancy standards and sustainability, as part of our work in the public interest.

We look forward to working closely with both governments to help them deliver on their ambition to unlock economic growth.

A spokesperson for the British Poultry Council said:

We are thrilled to see the Chancellor prioritising UK poultry meat in the Economic and Financial dialogue with China. Launching discussions on lifting the HPAI ban, introducing regionalisation, restoring trade in high-value breeding stock, and resuming market access talks are key milestones for growth in British poultry meat. These steps are set to drive innovation, create jobs, and boost exports.

Contributing to food security both at home and abroad, such talks reinforce the UK’s position as a global leader in the sector. Thank you to the Agriculture, Food and Drink Counsellor for your support, along with all the government officials in Defra and DBT involved. Working together means building a robust foundation for growth, ensuring the continued success of British poultry meat.

A spokesperson for the Pet Industry Federation (PIF) said:

The Pet Industry Federation fully supports the UK government in committing to a pet food protocol that would enable the export of UK pet food to China. We have seen first-hand the significant enthusiasm from Chinese state officials to facilitate these exports. This presents a major opportunity for UK pet food manufacturers to access one of the world’s largest and fastest-growing markets for pet products.

At present, several EU countries and the USA are able to export pet food to China, which gives them a competitive edge. By securing a similar agreement, the UK can unlock substantial economic benefits, bolster the global reputation of our pet food industry, and take advantage of the strong demand for high-quality UK products overseas. We welcome the Government prioritising this protocol to ensure the UK does not miss out on this vital opportunity.

A spokesperson for UK Pet Food said:

UK Pet Food welcomes the commitment to sign the pet food protocol as part of the Economic and Financial Dialogue in China. This fundamental agreement represents a major step forward in enabling UK pet food manufacturers to access the Chinese market, reflecting the sector’s commitment to producing high-quality, safe, and innovative products. We are confident that this protocol will strengthen bilateral trade relations and create significant opportunities for the UK pet food industry.

By fostering partnerships with the Chinese market, this agreement not only supports the growth of our sector but also meets the rising global demand for premium pet food. UK Pet Food is committed to working closely with the UK government and industry stakeholders to ensure the protocol’s successful implementation and to build long-term cooperation.

A GlaxoSmithKline spokesperson said:

GSK supports the UK-China Economic Financial Dialogue recognizing its importance in fostering mutual growth in healthcare, getting ahead of disease by preventing it with GSK innovative solutions.

A spokesperson for the Association of British HealthTech Industries said:

To ensure equity of access for patients around the world to HealthTech that enhances and saves lives, regulatory harmonisation is a goal we fully support.

The press release issued by HM Treasury on 8 January 2025.

The UK Government has today (8th January 2025) announced a full asset freeze against Blood and Honour, an entity it has reasonable grounds to suspect of being involved in terrorist activities through promoting and encouraging terrorism, seeking to recruit people for that purpose and making funds available for the purposes of its terrorist activities.

All assets and economic resources in the UK belonging to, or owned or controlled by, Blood and Honour must now be frozen. No person or entity required to comply with UK sanctions can deal with any funds or economic resources belonging to, or owned or controlled by Blood and Honour (or any entities it owns or controls). They also cannot make funds, financial services or economic resources available to or for the benefit of Blood and Honour (or any entities it owns or controls) unless they have obtained  a licence from HM Treasury or an exception applies.

This action is the first use of the Treasury-led Domestic Counter-Terrorism sanctions regime to target extreme right-wing terrorism. The designation of Blood and Honour is a clear signal that the UK works proactively to stop terrorist financing and will take action against any who try to exploit the UK financial system for this activity.

Further information:

• From 8th January 2025, all parts of Blood and Honour including any aliases it operates under, which are in the UK, the UK Crown Dependencies and Overseas Territories are subject to an asset freeze. Additionally, prohibitions on making funds, financial services and economic resources available to them or for their benefit also apply.
• Regulation 5 of the Domestic Counter-Terrorism sanctions regulations allows HMT to designate entities by name for the purpose of freezing assets and imposing the prohibitions referred to above which apply to them or any of the entities they own or control.
• An asset freeze means that it is generally prohibited to deal with the funds or economic resources which are owned, held, or controlled by a designated person. The prohibitions on making funds, financial services and economic resources available prevent them from being made available directly or indirectly to a designated person or to another person for the benefit of that designated person. Actions that intentionally directly or indirectly circumvent the asset freeze or the aforementioned prohibitions are also prohibited.
• When an asset freeze is applied, the funds or economic resources are frozen immediately by the person in possession or control of them.
• Imposing an asset freeze does not change the ownership of the frozen funds or economic resource and nor are they transferred to HM Treasury for safekeeping.

Also Sanctioned:

The designation extends to all parts of Blood and Honour including any aliases it operates under e.g. 28 Radio and Combat 18.

The press release issued by HM Treasury on 16 December 2024.

Chancellor of the Exchequer, Rachel Reeves confirms the Spring forecast will take place on Wednesday 26 March.

Today (Monday 16 December) the Chancellor has confirmed to the House of Commons that the Office for Budget Responsibility (OBR) has been commissioned for an Economic and Fiscal Forecast which will be published on 26 March 2025.

This is in line with the Budget Responsibility and National Audit Act 2011 which requires the OBR to produce two forecasts each financial year. This will be accompanied by a statement to Parliament from the Chancellor.

The Chancellor remains committed to one major fiscal event a year to give families and businesses stability and certainty on upcoming tax and spending changes and, in turn, to support the government’s growth mission.

The press release issued by HM Treasury on 13 December 2024.

Chancellor Rachel Reeves and Treasury minister Tulip Siddiq, will today open the 100th banking hub in Darwen, Lancashire.

Chancellor of the Exchequer, Rachel Reeves, and Economic Secretary, Tulip Siddiq, will today open the UK’s 100th banking hub in Darwen, Lancashire, which has been set up in response to bank branch closures in the town.

The newly opened banking hub will give customers of the largest high street banks the ability to get cash out, deposit cheques and ensures that local residents have access to face to face banking services.

Kickstarting economic growth is the number one mission for this Government – something cemented in the Plan for Change launched last week, where the Prime Minister redoubled our commitment to raise living standards in every part of the United Kingdom. The roll out of banking hubs will be a significant boost for local people and businesses, helping to revitalise the local high street and raise living standards across the UK.

The opening of the 100th banking hub is a significant landmark on the road to delivering on the government’s manifesto commitment to work with industry to open 350 banking hubs by the end of this parliament.

Rachel Reeves, Chancellor of the Exchequer, said:

Reaching this milestone of 100 banking hubs is a huge step towards making sure that people across the country have access to essential face-to-face banking services.

High streets are the beating heart of our communities but were neglected for too long under the previous government. We are revitalising our high streets with our target for 350 banking hubs, reforming business rates to make them fairer and clamping down on antisocial behaviour.

Banking hubs are a collaborative industry initiative, set up in response to bank branch closures on high streets across the country.

Instead of one bank owning a branch, the responsibility is shared between the banks. This means that they can share the running costs and all operate in one convenient location.

All customers will benefit from Monday-Friday access to cash and basic banking services via a traditional counter service operated by the Post Office. Community bankers from each of the five banks with the largest number of customers in the area will also come in one day per week to assist their customers with more complex banking issues like debt advice, bereavement services and fraud support.

In the Darwen banking hub, the participating banks are NatWest, Santander, Lloyds, Halifax and Barclays, the banks with the most customers in that location. Opening the banking hub will protect access to cash and banking services for 10,000 local residents and 150 shops within 1 kilometre of Darwen town centre.

The 100th opening is a significant milestone. In September, Economic Secretary secured a historic agreement from industry to deliver on this commitment, with 230 hubs expected to be open by the end of next year, helping to revitalise towns and high streets up and down the country.

Tulip Siddiq, Economic Secretary to the Treasury, added:

We are delighted to see the continued growth of banking hubs, which are playing an essential role in meeting the needs of communities where traditional banking options have declined.

These hubs are not only vital for residents and businesses, but they also play a key role in revitalising our high streets, bringing footfall back to town centres, and repurposing unused buildings for community benefit.

The success of these hubs proves that shared banking services can provide a solution that benefits everyone, from residents to local businesses.

The opening of banking hubs can play an important role in revitalising our high street and repurposing disused buildings in town centres all while providing a vital service to businesses and people in those communities.

Evidence from Brixham in Devon and Rochford in Essex  where banking hubs have recently opened has backed this up, research from Cash Access UK the group that run banking hubs shows that  almost half of businesses surveyed saying it has increased footfall in the town and 30% of residents saying that they visit the town more regularly and stay for longer because a banking hub has opened in the town.

Gareth Oakley, CEO, Cash Access UK, said:

Access to cash and face-to-face banking services remain vital to millions of people and businesses who rely on it.

We’re delighted that banking hubs, alongside deposit services are proving to be successful and are making a real difference to communities and high streets up and down the country.

The press release issued by HM Treasury on 12 December 2024.

What is a Spending Review?

A Spending Review is the process the government uses to set all departments’ budgets for future years. This covers both the services the public uses every day, like the NHS, schools and transport, and how the government will invest in research, energy security and infrastructure to drive economic growth across the country.

In the same way that households budget what they spend, the government does this with public money. This is to ensure it is spent effectively.

How does the government spend money?

The total amount the government spends is known as Total Managed Expenditure (TME). This is made up of:

• Spending by departments – this is the amount that government departments have been allocated by the Treasury to spend each year and is known as Departmental Expenditure Limits (DEL).
• Money spent on things that are harder to plan for, usually because demand for them varies, so budgets are not fixed in advance. This includes welfare, pensions and debt interest payments. This is known as Annually Managed Expenditure (AME). The level of AME spending in the future is forecast by the Office for Budget Responsibility.

DEL budgets are split into two additional categories:

• Resource spending – which covers what the government spends on its day-to-day running and administration costs. These are generally goods and services, like nurses’ pay or medicines.
• Capital spending – which is funding for investment to improve the UK’s infrastructure and public services. For example, new roads, hospitals and military equipment.

What is the Spending Review process?

The Chancellor of the Exchequer and Chief Secretary to the Treasury lead the Spending Review.

First, the government identifies key priorities for all departments, which includes the key outcomes that public services should deliver.

All departments are then asked to submit their budget requests to the Chief Secretary to the Treasury, detailing how much money they will need and how it will be used. Collaboration across government is key to ensuring this process runs smoothly and everyone understands how budget requests across different departments will help deliver the government’s priorities.

The Chief Secretary and Treasury officials review these requests, assess how they align with the government’s priorities and make sure they offer good value for money for the taxpayer, working together with departments to understand the requests. The Chief Secretary then meets with Secretaries of State to discuss and agree a final budget, including how it will be spent and what outcomes it should deliver.

The government often uses a Spending Review to set budgets for several years. At Autumn Budget 2024, the government committed to setting resource budgets for three years and capital budgets for five years, with reviews every two years. This will enable better financial planning and help achieve value for money.

The Chancellor of the Exchequer then approves and allocates final budgets to each department.

What is happening in the current Spending Review?

Spending Review 2025 is taking place in two phases.

At the Autumn Budget on 30 October 2024, the Chancellor set out the outcome of Phase 1 of the Spending Review, which confirmed departmental budgets for 2024-25 and set budgets for 2025-26. She also announced the total level of funding planned for Phase 2 (‘the envelope’), which will conclude and be published in late spring of 2025.

Phase 2 will prioritise delivering the government’s missions. As part of this departments will be expected to make better use of technology and seek to reform public services, to support delivery of the government’s plans for a decade of national renewal.

The press release issued by HM Treasury on 12 December 2024.

Chancellor of the Exchequer launches second phase of the Spending Review.

Government departments will be expected to find savings and efficiencies in their budgets, in a push to drive out waste in the public sector and ensure all funding is focused on the government’s priorities.

Every single pound the government spends will be subjected to a line-by-line review to make sure it’s being spent to deliver the Plan for Change and that it is value for money, as the Chancellor Rachel Reeves today (Tuesday 10 December) launches the next round of government spending.

It will be the first time in over a decade and a half that government departments have been asked to take such an approach, with what’s called a “zero-based review” last undertaken 17 years ago.

Reeves will today begin her work with government departments and reiterate that they cannot operate in a business-as-usual way when reviewing their budgets for the coming years, as the new government continues to fix the foundations after inheriting a £22bn black hole, alongside crumbling public services and damaged public finances.

Secretaries of State across government will need to allocate their budgets to ensure that government spending is focused on the Prime Minister’s Plan for Change, and that every pound of taxpayers’ money is spent well. The Chancellor will work with departments to prioritise spending that supports the milestones to deliver the Plan. This includes boosting growth to put more money in working people’s pockets, fixing the NHS, creating safer streets, making Britain a clean energy super-power and giving every child the best start in life while strengthening our borders, national security and the economy.

Chancellor of the Exchequer Rachel Reeves said:

By totally rewiring how the government spends money we will be able to deliver our Plan for Change and focus on what matters for working people. The previous government allowed millions of pounds of taxpayers’ money to go to waste on poor value for money projects. We will not tolerate it; I said I would have an iron grip on the public finances and that means taking an iron fist against waste.

By reforming our public services, we will ensure they are up to scratch for modern day demands, saving money and delivering better services for people across the country. That’s why we will inspect every pound of government spend, so that it goes to the right places and we put an end to all waste.

The Prime Minister has been clear that public services must reform if they are to be put on a sustainable footing in the long-term, so that outcomes can be improved for people who depend on services every day. Today’s announcement builds on the Chancellor of the Duchy of Lancaster yesterday launching a £100 million fund to pioneer public service reform and deliver the Government’s Plan for Change, by deploying new test-and-learn teams into public services across the country. They will be empowered to experiment and innovate to fix the public sector’s biggest challenges, working towards the Government’s ambitious and far-reaching reform programme that will seek to break down Whitehall silos and galvanise government as it seeks to deliver the Plan for Change.

Departments will ensure budgets are scrutinised by challenge panels of external experts including former senior management of Lloyd’s Banking Group, Barclays Bank and the Co-operative Group. Panels will bring an independent view to what government spend is or isn’t necessary, with a mixture of expertise from local delivery partners, think tanks, academic experts and private sector backgrounds.

In letters sent by the Chief Secretary to the Treasury, departments will be advised that where spending is not contributing to a priority, it should be stopped. Although some of these decisions will be difficult, the Chancellor is clear that the public must have trust in the government that it is rooting out waste and that their taxes are being spent on their priorities.

Work has already begun on evaluating poor value for money spend, with an evaluation into the £6.5m spent on Social Workers in Schools programme, which placed social workers in schools, finding no evidence of positive impact on social care outcomes, meaning the intervention was not considered cost-effective. The Government has made clear it will not shy away from taking the difficult decisions needed to fix the foundations, as shown by the Chancellor’s decisions at the Budget to balance the books.

Departments will be expected to work closely together to identify how their work contributes to the Government’s missions, meeting in mission clusters throughout the process to agree priorities and links.

Throughout this process, the ideas, expertise and innovation of the private sector will be sought out and brought right into the heart of government. An online portal has been launched to give businesses the opportunity to put forward policy proposals for the Spending Review, including on how government can deliver public services more efficiently or effectively. These representations will be collated and shared with departments for consideration in their submissions.

The press release issued by HM Treasury on 14 November 2024.

Chancellor to announce package of reforms to ensure the UK’s status as a global powerhouse for financial services in her first Mansion House speech.

The Chancellor will announce a package of reforms to drive growth and competitiveness in financial services, as she argues that regulatory changes to eliminate risk after the financial crisis have ‘gone too far’ and led to unintended consequences.

In her first Mansion House speech as Chancellor, Rachel Reeves will say that the UK’s status as a global financial centre cannot be taken for granted.

She will argue that, while the UK will always uphold high standards, a system has been created which seeks to eliminate risk taking and holds back economic growth. “The UK has been regulating for risk, but not regulating for growth,” she will say.

The Chancellor will outline a plan to rebalance the system, setting the financial services sector up to innovate, grow and seize the opportunities for investment in businesses, infrastructure and clean energy across Britain.

This will include setting new growth-focused remits for financial service regulators, the publication next year of the first ever Financial Services Growth and Competitiveness Strategy and creating pension mega funds to boost investment so that ordinary people benefit from growth.

Speaking in the City of London, the Chancellor of the Exchequer Rachel Reeves will say:

Before we came into government, I was clear that the financial services sector must play a central part in our economic vision and our plan 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: 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.

She will add:

While 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, 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 which we must now address.

She will conclude by saying:

The changes I have set out today will drive growth and competitiveness through investment and through reform.

A long-term strategy to harness the strengths of the financial services sector: making the UK a global leader in sustainable finance, developing the right approach to redress to reduce uncertainty, reinvigorating our capital markets by unlocking private investment through our pension funds, and reforming our approach to regulation to make it more dynamic and more competitive.

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

Reform to unlock innovation and growth

While the UK’s regulatory model for financial services is respected around the world, reform is needed to unlock innovation, drive more investment and deliver sustainable economic growth.

High regulatory standards will be maintained but parts of the regulatory system will be rebalanced to drive economic growth and competitiveness. The Chancellor has written to the Financial Conduct Authority, Prudential Regulation Committee, Financial Policy Committee and Payment Systems Regulator to ensure a greater focus on supporting economic growth.

The Financial Ombudsman Service framework will also be modernised so that it continues to play a vital role for consumers to get redress while giving clearer expectations around its decisions for consumers and for financial services firms.

The government will also consult on replacing the current Certification Regime, which applies to staff below senior management level, with a more proportionate approach that reduces costs so that businesses are freed up to focus on growth.

To combat the scourge of fraud that cost UK consumers almost £8.3 billion last year alone and steals money away from investment and lending by the financial services sector, a coordinated effort across sectors, law enforcement and government is needed. The Chancellor, Home Secretary and Secretary of State for Science, Innovation and Technology have therefore written to the tech and telecommunication sectors calling for them to go further and faster in reducing the scale of fraud taking place on their platforms and networks – with an update on progress requested by March 2025 ahead of an expanded fraud strategy.

Further action is being taken to drive innovation in payments with the publication of a National Payments Vision, and reinvigorate the UK’s capital markets by committing to legislate to establish PISCES by May 2025 – a world-first regulated market for trading private company shares where transfers will be exempted from stamp duty taxes on shares.

The government is launching a pilot to deliver a Digital Gilt Instrument, using distributed ledger technology (DLT), demonstrating the government’s commitment to innovation in the financial services sector.

The government is also consulting on introducing a new framework for UK-based captive insurance companies to make the UK insurance market a more attractive hub for businesses seeking efficient risk solutions.

Stability – confidence to invest

Building on the Budget – which fixed the foundations of the economy by repairing the public finances and bolstered economic and fiscal stability – the Chancellor will set out a clear path for growth in the financial services sector.

The government will publish the first ever Financial Services Growth and Competitiveness Strategy in the Spring to deliver long-term certainty and cement the sector’s place at the heart of the government’s 10-year modern Industrial Strategy.

The government will propose focusing on five priority growth opportunities in financial services to take advantage of the UK’s existing strengths and maximise the potential for growth.

These will be FinTech, sustainable finance, asset management and wholesale services, insurance and reinsurance, and capital markets. A Call for Evidence will be published alongside the announcement to ensure that industry voices are at the heart of designing the new Strategy.

The Strategy will reflect the fact that the success of the financial services sector is built on strong ties with international partners. This means strengthening partnerships with established and fast-growing financial centres will be a cornerstone of the government’s approach to financial services: critical to attracting foreign investment and delivering economic benefits for the UK.

Investment through financial services

To deliver more investment in businesses, infrastructure and clean energy, the Chancellor will also announce bold reforms to the pension system and lay the foundations for a world-leading sustainable finance regulatory regime.

Two consultations will be published ahead of the Pension Schemes Bill in the Spring to merge defined contribution pension schemes and the Local Government Pension Scheme in England and Wales into megafunds – mirroring the pensions landscape in Australia and Canada. This, along with reforms to ensure better value from these pension schemes, could unlock around £80 billion new investment in businesses and infrastructure, while boosting savers’ pension pots.

The Chancellor will announce that the British Growth Partnership has secured the support of two UK pension funds for its future launch. Aegon UK – as a substantial cornerstone investor – and NatWest Cushon, who have combined assets worth over £219 billion, have both agreed to work with the British Business Bank with a view to investing in the UK growth companies of the future, subject to commercial and regulatory steps and, where appropriate, agreement from the Trustees. She is also expected to announce that, alongside Phoenix Group, the British Business Bank has completed its LIFTS investment in Schroders Capital, to create a new £500 million investment vehicle to invest in UK science and technology. The government expects 20% of the LIFTS capital to be invested into life sciences.

The Chancellor will also set out plans to mobilise trillions of pounds of private capital to support clean energy and growth as part of the UK’s efforts to reclaims its position as a global leader in climate change. This follows action at the International Investment Summit and Budget to unlock investment, including £27.8 billion of capitalisation for the National Wealth Fund, which is expected to mobilise over £70 billion of private investment.

To deliver a world-leading sustainable finance framework, the Treasury will publish draft legislation to boost investor confidence in sustainable companies by regulating ESG ratings providers, publish a consultation on the value case for a UK Green Taxonomy, commit to consult on economically significant companies disclosing information using future UK Sustainability Reporting Standards and launch a set of integrity principles for voluntary carbon and nature markets ahead of a consultation in the new year.

To underpin continued UK leadership on transition finance, the government is delivering one of the key recommendations of the Transition Finance Market Review by co-launching the Transition Finance Council with the City of London Corporation. The government will also consult in the first half of next year on how best to take forward the manifesto commitment on transition plans in support of its ambition to become the global hub for transition finance –  ensuring the UK’s regulatory framework is growth-focused, internationally competitive and maintains the UK’s status as a global financial hub. It has also emphasised the transition to net zero in the government’s economic strategy within the remit of the Bank of England’s Monetary Policy Committee, and reinstated sustainable finance as an area the Financial Policy Committee should support as part of its secondary objective.

These announcements come alongside COP29’s ‘Finance, Investment, and Trade Day’ currently underway in Baku, Azerbaijan. Representing HM Treasury at COP29, Growth Minister Lord Spencer Livermore laid out the UK’s commitment to making the UK the sustainable finance capital of the world, mobilise climate finance from a range of sources and reform the global financial system so it delivers better on climate change.

The government recognises the invaluable role of the mutual and co-operative sector in driving inclusive growth across the UK. It is therefore announcing a package to help unlock the full potential of the sector. This includes publishing a call for evidence on reform to credit union common bonds in Great Britain, writing to the Financial Conduct Authority and Prudential Regulation Authority asking them to produce a report on the mutuals landscape in 2025, and welcoming the establishment of an industry-led Mutual and Co-operative Business Council.

The government has already laid legislation to support modernisations to the Building Societies Act 1986 and continued funding the Law Commission to conduct reviews considering how the laws governing co-operatives, community benefit societies, mutual insurers, and friendly societies can be modernised.

The Chancellor will also announce an upcoming Financial Conduct Authority consultation to help households make better-informed decisions about their finances, as part of the government and regulator’s joint Advice Guidance Boundary Review.

Stakeholder reaction to the Chancellor’s Mansion House package

David Postings, Chief Executive of UK Finance said:

The Chancellor has set out a positive vision for financial services, which are a UK success story and vital to our economy. I strongly welcome her support for the sector, coupled with the fact that she is addressing how we can best balance risk and consumer protection to help support economic growth. Key to this is the regulatory environment, with the new remit letters rightly stressing the importance of growth and competitiveness in regulators’ work. The Chancellor has listened to industry and is delivering across a range of areas we have called for action on, including a digital gilt, tackling payment fraud, reforming the Financial Ombudsman Service, supporting green finance, and the National Payments Vision. I look forward to continuing to work closely with her and the government to ensure the UK retains a strong and globally competitive financial services sector.

BVCA Chief Executive Michael Moore said:

The private capital industry warmly welcomes the decisive action taken by government to reform our pensions system to boost investment and deliver growth to the UK economy.

Creating greater opportunity for investment by pension funds into private capital could have a transformational impact on the UK’s most promising businesses whilst delivering strong returns for pension savers.

Richard Oldfield, Group CEO Schroders said:

We have all the building blocks we need to generate growth in the UK. We have great, innovative companies; we have the capital, and we have the expertise and a world class capital market to link the two. What we need now is an injection of optimism and a healthier attitude to taking risk in the pursuit of reward. It is great to see the government putting sensible risk taking back at the centre of our economy. Whether that’s on green finance, infrastructure, science or tech; firms like Schroders working in partnership with pension schemes, regulators and the government can unlock the potential of the UK for the benefit of all of us.

James Alexander, CEO, UKSIF said:

We welcome the new Chancellor’s prioritisation of sustainable finance in her first Mansion House speech. We are pleased to see this ambitious suite of measures including further progress on transition plans, harmonisation with international standards, and carbon market integrity. If delivered, these measures could position the UK as a world-leading centre for sustainable finance.

The press release issued by HM Treasury on 13 November 2024.

Biggest pension reforms in decades will merge Local Government Pension Scheme assets and consolidate defined contribution schemes into megafunds.

Pension megafunds will be created as part of the biggest set of pension reforms in decades, unlocking billions of pounds of investment in exciting new businesses and infrastructure and local projects.

After her inaugural Budget that fixed the foundations to deliver stability, Rachel Reeves will use her first Mansion House speech as Chancellor to announce bold action to tackle the fragmented pensions landscape, deliver investment and drive economic growth – which is the only way to make people better off.

The radical reforms, which will be introduced through a new Pension Schemes Bill next year, will create megafunds through consolidating defined contribution schemes and pooling assets from the 86 separate Local Government Pension Scheme authorities.

These megafunds mirror set-ups in Australia and Canada, where pension funds take advantage of size to invest in assets that have higher growth potential, which could deliver around £80 billion of investment in exciting new businesses and critical infrastructure while boosting defined contribution savers’ pension pots.

Chancellor of the Exchequer, Rachel Reeves said:

Last month’s Budget fixed the foundations to restore economic stability and put our public services on a firmer footing. Now we’re going for growth.

That starts with the biggest set of reforms to the pensions market in decades to unlock tens of billions of pounds of investment in business and infrastructure, boost people’s savings in retirement and drive economic growth so we can make every part of Britain better off.

Deputy Prime Minister, Angela Rayner said:

We’ve all seen the fantastic work carried out day in, day out, by our frontline workers and it’s about time their pension started working just as hard by driving investment in their communities.

This is about harnessing the untapped potential of the pensions belonging to millions of people, and using it as a force for good in boosting our economy.

Pensions Minister, Emma Reynolds said:

Harnessing the power of this multi-billion-pound industry is a win-win, benefiting future pensioners, and our wider economy.

These reforms could unlock £80 billion of investment into exciting new businesses and critical infrastructure.

The UK pension system is one of the largest in the world – with the Local Government Pension Scheme and Defined Contribution market set to manage £1.3 trillion in assets by the end of the decade. However, our pension landscape is fragmented and lacks the size needed to invest in exciting new businesses or expensive projects like infrastructure.

The government’s analysis – published today in the interim report of the Pensions Investment Review at Mansion House – shows that pension funds begin to return much greater productive investment levels once the size of assets they manage reaches between £25-50 billion. At this point they are better placed to invest in a wider range of assets, such as exciting new businesses and expensive infrastructure projects. Even larger pensions funds of greater than £50 billion in assets can harness further benefits including the ability to invest directly in large scale projects such as infrastructure at lower cost.

This is supported by evidence from Canada and Australia. Canada’s pension schemes invest around four times more in infrastructure, while Australia pension schemes invest around three times more in infrastructure and 10 times more in private equity, such as businesses, compared to Defined Contribution schemes in the UK. Benchmarking against domestic and international examples show how consolidation of the Local Government Pension Scheme and defined contribution schemes into megafunds could unlock around £80 billion of investment in productive investments like infrastructure and fast-growing companies.

The government is therefore consulting on proposals to take advantage of pension fund size and improve their governance.

Local Government Pension Scheme

The Local Government Pension Scheme in England and Wales will manage assets worth around £500 billion by 2030. These assets are currently split across 86 different administering authorities, managing assets between £300 million and £30 billion, with local government officials and councillors managing each fund.

Consolidating the assets into a handful of megafunds run by professional fund managers will allow them to invest more in assets like infrastructure, supporting economic growth and local investment on behalf of the 6.7 million public servants – most of whom are low-paid women – whose savings are managed.

These megafunds will need to meet rigorous standards to ensure they deliver for savers, such as needing to be authorised by the Financial Conduct Authority. Governance of the Local Government Pension Scheme will also be overhauled to deliver better value from investment decisions, which independent research suggests could free up money in the long-term to support local public services.

Local economies will be boosted by the changes as each Administering Authority will be required to specify a target for the pool’s investment in their local economy, working in partnership with Local and Mayoral Combined Authorities to identify the best opportunities to support local growth. If each Administering Authority were to set a 5% target, that would secure £20 billion of investment in local communities.

A new independent review process will be established to ensure each of the 86 Administering Authorities is fit for purpose.

Defined contribution schemes

Defined contribution pension schemes are set to manage £800 billion worth of assets by the end of the decade.

There are currently around 60 different multi-employer schemes, each investing savers’ money into one or more funds. The Government will consult on setting a minimum size requirement for these funds to ensure they deliver on their investment potential.

The government will also consult on measures to facilitate this consolidation into megafunds, including legislating to allow fund managers to more easily move savers from underperforming schemes to ones that deliver higher returns for them.

The press release issued by HM Treasury on 13 November 2024.

Legislation has today been introduced to allow government, for the first time, to permanently cut business rates for retail, hospitality and leisure properties.

Draft legislation has today been published to, for the first time, permanently cut business rates for retail hospitality and leisure properties from 2026.

High streets across the UK will benefit from business rates for retail, hospitality and leisure properties being permanently cut for the first time from 2026, following the introduction of legislation in Parliament today.

This begins the delivery of the government’s promise to reform business rates and help the high street.

The tax cut will be funded by a tax rise for the very largest business properties, such as online sales warehouses.

Until then, 250,000 retail, hospitality and leisure (RHL) properties will receive 40% relief off their business rates bills up to £110,000 per business to help smooth the transition to the new system. This support is alongside the Budget announcement to freeze the small business multiplier, together with Small Business Rates Relief protecting over a million properties from inflationary increases. Taken together, this is a package worth over £1.6 billion in 2025-26.

To further support retailers, the government is today also introducing legislation to increase the Employment Allowance from £5000 to £10,500, meaning 865,000 employers will not pay employer national insurance next year.

James Murray, Exchequer Secretary to the Treasury, said:

For too long the business rates system has been working against our high streets.

Today is a major step towards our new system that will support retail, hospitality and leisure businesses on our high streets to succeed.

This Bill paves the way for a permanent cut to their tax rate, helping to level the playing field between them and online and out-of-town businesses.

The government today is also legislating to increase the Employment Allowance – a discount in National Insurance bills – from £5,000 to £10,500 from April 2025.

The increase to the Employment Allowance will mean that 865,000 employers will not pay any employer National Insurance next year, and 250,000 employers will pay less National Insurance than they are now.

It will allow firms to employ up to four National Living Wage workers full time without paying employer National Insurance on their wages.

The eligibility of the allowance will also be expanded to include all eligible employers, rather than just those with a wage bill of less that £100,000 a year.

Craig Beaumont, Federation of Small Businesses Executive Director, said:

We are pleased to see James Murray and the whole Treasury team take this important step forward today – legislating for the significant increase to the Employment Allowance which FSB strongly championed, to protect smaller businesses with employment costs. But also taking a decisive step forward on business rates reform.

For far too long, permanent business rates reform has been put into the too difficult box. It is extremely encouraging on rates to see Ministers standing up for small firms in retail and hospitality and taking long-term action necessary to the future of our high streets – we look forward to continuing to work in partnership with the new Government to make sure no small businesses whatsoever are blocked from achieving their ambitions by a rates system that has not simply not kept pace with the needs of a modern economy.

This follows important action announced by the Business Secretary to tackle the scourge of late payments and to take forward an Industrial Strategy to unblock the supply side barriers holding small firms back from their full potential.

To calculate a property’s business rates bill, the rateable value of a property is multiplied by the relevant multiplier (tax rate).

Today’s Non-Domestic Rating (Multipliers and Private Schools) Bill means that new permanently lower multipliers for RHL properties can be introduced from 2026. This permanent tax cut will ensure that they benefit from much-needed certainty and support.

This will help the government achieve its goal for a fairer business rates system that protects the high-street and supports investment – one that is fit for the 21st century.

With public services crumbling and a £22 billion fiscal hole to address, ministers have been clear that the new RHL tax rates must be sustainably funded.

This will be achieved by a higher tax rate for the top 1% most valuable properties – those with a rateable value of at least £500,000. Large distribution warehouses, including those used by online giants, will help fund the high street tax cut.

Until 2026, 250,000 RHL premises will see 40% relief off their bills next year up to a cash cap of £110,000 per business.

The new RHL tax rates will provide meaningful support to RHL businesses of all sizes in recognition of the role RHL chains play in attracting footfall to the high-street. A discussion paper has also been published to engage with businesses over the next six months on how to further reform the system outside of retail, hospitality and leisure.

Sebastian James, former CEO of Boots and Dixons Carphone, said:

It is very welcome to see the Government take steps to rebalance the heavy business rates load on bricks and mortar retail and hospitality as businesses, both large and small, in this vital sector seek to mitigate cost pressures in order that our high streets up and down the country can flourish as the centres of their communities.

The National Insurance Contributions Bill which will increase the Employer Allowance, also increases National Insurance for businesses to invest in public services, including to help fund the NHS by an extra £22.6 billion over two years compared to 2023/24, as well as other measures to avoid austerity.  This will support the NHS to deliver its First Step on its Health Mission of 40,000 extra elective appointments a week and make progress towards the commitment that patients should expect to wait no longer than 18 weeks from referral to treatment.

The press release issued by HM Treasury on 3 October 2024.

Banks to be given new powers to protect consumers against scams.

Banks will be given new powers to delay and investigate payments that are suspected of being fraudulent, helping to protect consumers against scammers.

New laws proposed by the Government today will extend the time that payments can be delayed by 72 hours where there are reasonable grounds to suspect a payment is fraudulent and more time is needed for the bank to investigate.

This will give banks more time to break the spell woven by fraudsters over their victims and tackle the estimated £460 million lost to fraud last year alone.

Economic Secretary to the Treasury, Tulip Siddiq said:

Hundreds of millions of pounds are lost to scammers each year, targeting vulnerable communities and ruining the lives of ordinary people.

We need to protect these people better, which is why we are giving banks more time to investigate suspicious payments and break the criminal spell that scammers weave.

Minister of State with Responsibility for Fraud, Lord Sir David Hanson said:

Fraud is a crime that can devastate lives, and anyone can be affected.

That’s why measures like this are so crucial to provide banks the investigative powers they need to better protect customers from this appalling crime.

Fraud accounts for over a third of all crime perpetrated in England and Wales, making it the most prevalent form of crime commitment in the country. This has been driven by a growing number of purchase scams and the emergence of so-called ‘romance scams’, where victims target vulnerable people and trick them into transferring large amounts of money by pretending to be interested in a romantic relationship.

The new rules will help protect people against these types of scams by allowing banks up to an additional 72 hours to investigate suspicious payments. Currently banks must either process or refuse a payment by the end of the next business day.

Which? Director of Policy and Advocacy, Rocio Concha said:

This is a positive step in the fight against fraud. While it should not affect the vast majority of everyday payments, it’s important that banks can delay a bank transfer and take action if they think a customer is being targeted by a scam.

These measures should be used in a careful and targeted way. Financial firms of all sizes should also ensure they share intelligence and work with the police and other authorities to shut down accounts used for fraud and pursue the criminals behind them.

UK Finance Managing Director of Economic Crime, Ben Donaldson said:

UK Finance has long called for firms to be allowed to delay payments in high-risk cases where fraud is suspected, and we are delighted to see proposed new laws supporting this.

This could allow payment service providers time to get in touch with customers and give them the advice and support they need to avoid being coerced by the criminals who want to steal their money. This could potentially limit the psychological harms that these awful crimes can cause and stop money getting into the hands of criminals.

Banks who have reasonable grounds to suspect a payment is fraudulent will need to inform customers when a payment is being delayed. They will also need to explain what the customer needs to do in order to unblock the payment.

The need for evidence to trigger a delay will help protect people and businesses from unnecessary payment delays. Banks will also be required to compensate customers for any interest or late payment fees they incur as a result of delays.