Tag: Treasury

The press release issued by HM Treasury on 7 August 2024.

Rachel Reeves to bang the drum for Britain in visit to New York City and Toronto this week.

• Chancellor to share her vision for growth and champion UK sectoral strengths across financial services, clean energy and infrastructure to investors and CEOs.
• Trip to build momentum for the International Investment Summit on 14 October.

Chancellor Rachel Reeves on 5 August set off on a visit to New York and Toronto with the message that Britain is open for business.

She will meet with CEOs and senior representatives from major players across the US and Canada’s foremost industries, highlighting that early steps taken by the government to fix the foundations and restore economic stability makes the UK an attractive destination for investment.

Chancellor of the Exchequer Rachel Reeves:

I’ve wasted no time in my first month in office in taking the difficult decisions necessary to fix the foundations of our economy, so we can rebuild Britain and make every part of the country better off. That means restoring economic stability so we can attract the investment needed to create good jobs, boost wages, and improve opportunity across Britain.

There is no credible plan for growth without private sector investment. That’s why I’m breaking down barriers at home and banging the drum for Britain abroad as we gear up to host the International Investment Summit.

While in New York, the UK’s first female Chancellor of the Exchequer will meet with Wall Street leaders and host a reception to celebrate women in finance. The US is the UK’s biggest financial services trading partner, with UK exports to the US valued at £23.4bn annually. The sector is at the heart of the government’s core mission to deliver sustainable economic growth as a jewel in the crown of the UK economy and one of its success stories, contributing almost 10% of UK GVA and employing 1.2 million people.

In Toronto, the Chancellor will meet with names in the world of clean energy and infrastructure. The government’s mission to make Britain a Clean Energy Superpower will bring opportunities for economic growth whilst helping the UK meet its target of clean power by 2030. That mission has started in earnest with the creation of Great British Energy to partner with the private sector and secure the investment needed to accelerate the transition, the sweeping away of barriers to onshore wind farms, and a record £1.5 billion budget for this year’s renewable energy auction to get Britain building green.

During her time in the US and Canada, Reeves will point out that the government has moved quickly to create a stable environment where businesses have the confidence to invest in the UK. This has included reform of a planning system that has long frustrated investment, ending the ban on on-shore wind and the establishment of a National Wealth Fund, backed by £7.3 billion to catalyse further private investment in our world-leading green and growth industries of the future.

The UK is already Europe’s leading hub for investment, with UK markets raising more capital than the next two highest European exchanges combined in 2023. But the Chancellor heads to North America with a renewed purpose to build upon this, with it being announced yesterday that Britain is to play host to the International Investment Summit on 14 October.

In doing so, Reeves will be looking to deepen the strong economic relationship between Britain and the two North American countries. The United States is the largest source of foreign investment in the UK and the UK is the third largest investment destination for Canadian companies, whom invested more than $73 billion of FDI stock in 2021.

The press release issued by HM Treasury on 7 August 2024.

Investors have already confirmed attendance at the government’s first International Investment Summit on 14 October, announced this weekend.

Rachel Reeves meeting with tech and financial services CEOs as part of 3-day trip across US and Canada, making the case that Britain is open for business.
Chancellor sets new ambition for data centres throughout the country to power growth, generate jobs and secure investment.
Rachel Reeves is meeting with the CEOs of BNY Mellon, Blackstone and CyrusOne in New York, with all companies confirming their attendance at the summit later this year as she carries the message that Britain is open for business.

Having taken early difficult decisions to address an inherited £22 billion black hole in the public finances, the Chancellor made the case she has wasted no time in prioritising economic stability and instigating growth-led reforms of the UK economy, once again making it an investment destination for global businesses.

Reeves championed the UK’s strengths during her meetings, including its globally recognised higher education system with four of the world’s top ten universities, its fourth place ranking for innovation in the Global Innovation Index, and its $1 trillion tech sector – the largest in Europe.

As part of her 3-day trip to the US and Canada, Rachel Reeves is also meeting with CoreWeave where she will set out for the first time a new government commitment to encouraging the building of data centres throughout the UK, to boost growth and create jobs.

The Deputy Prime Minister is already reviewing two appealed planning applications for data centres in Buckinghamshire and Hertfordshire as part of the government’s commitment to make the economic benefit of development a central consideration when intervening in the planning system – changes made by the Chancellor in her first speech just four weeks ago.

Data centres are central to the digital economy, housing the data that modern life is built on, and will continue to play a vital role in supporting the increasing use of cloud-based applications and storage by businesses and consumers, and the rollout of 5G.

It is estimated the sector employs around 17,000 people, with data centre operators generating an estimated £4.6 billion of annual revenue a year.

Chancellor of the Exchequer Rachel Reeves said:

The message is clear: Britain is open for business. And as more investors sign up for our International Investment Summit, it shows they believe it too.

They recognise we have taken some difficult decisions to fix the foundations of our economy and set us on a path to sustained economic growth as government’s number one mission – it is only by doing so that we can capitalise on Britain’s immense investment potential.

By rebuilding Britain we can make every part of the country better off. Aiming to have datacentres across the country is part of that. We are already reviewing two planning applications in the South East, but I’m determined to see new digital investments up and down the UK.

Business and Trade Secretary Jonathan Reynolds said:

Investment is vital for creating jobs and bringing economic growth to every part of the country. Seeing global investors back the UK is a vote of confidence in our economy, and shows we are an investment destination of choice.

This summit is an important opportunity to show Britain is back on the world stage and build long-term relationships that will boost investment across the UK in the months and years ahead.

During her visit to Toronto on Wednesday, Reeves will meet with Mark Carney to discuss the development of the National Wealth Fund (NWF) ahead of the International Investment Summit.

The Chancellor convened a meeting of the National Wealth Fund Taskforce – of which Mr Carney is a member – to launch the NWF just days after taking office, as an immediate commitment to the government’s new partnership with business and to support a new Industrial Strategy.

Backed by £7.3 billion of public investment to focus on priority sectors, the NWF stands to catalyse billions in private investment into our world-leading green and growth industries, with its aligning of key institutions creating a more compelling and certain offer for investors. The Chancellor and Mr Carney are expected to discuss the importance of rapid progress on the NWF as a key tenet of Britain’s pitch at the International Investment Summit.

The press release issued by HM Treasury on 25 July 2024.

Chancellor of the Exchequer Rachel Reeves to attend first G20 meeting in Rio de Janeiro, Brazil.

• Reeves to bang the drum for British business on first international visit since taking office
• First female Chancellor to champion the importance of female leadership in economics and finance

Chancellor of the Exchequer Rachel Reeves will today arrive in Rio de Janeiro, Brazil, to attend the G20 Finance Ministers and Central Bank Governors Meeting on her first international visit since taking office.

The Chancellor will meet with G20 counterparts for the first time, where she will champion British business and declare the country is ‘open for business’ once again after years of uncertainty and instability.

The Chancellor will tell an international audience that the number one priority of the new British government is to deliver economic growth to make every part of the country better off. She will urge business leaders to “take another look at Britain” as she talks to the Government’s plans to boost international investment.

She will outline to leaders of world economies how she will always act in the national interest on major international issues, including climate change and support for Ukraine as Russia’s illegal invasion continues into its third year. The Prime Minister has already recommitted £3 billion per year of military support to the end of the decade or for as long as needed.

Rachel Reeves, Chancellor of the Exchequer, said:

Over the coming days my message to international leaders is simple: after years of uncertainty and instability, Britain is open for business once again.

This new government’s number one mission is to boost economic growth so we can make every part of the country better off. That can only happen by working alongside business from around the world to encourage them to invest in the jobs and industries of the future.

That is why over the coming two days I will be banging the drum for British business and urging leaders to take another look at us. I’m ready to take my seat at the table alongside fellow finance ministers, steering the world economy and representing our national interests on the major issues of our time, including grasping the growth opportunities of the net zero transition and putting pressure on Russia to end the war in Ukraine.

Chancellor Reeves will also use her platform as the UK’s first woman Chancellor to champion the importance of female leadership in economics and finance, as she meets with other female leaders while at the G20.

Chancellor Reeves’ visit to Brazil is the latest step in the government’s national mission to grow the economy. Since taking office, she has pursued reform of the economy to fix its foundations and make every part of Britain better off, including announcing changes to the planning system, ending the ban on new onshore wind and launching a National Wealth Fund to catalyse private sector investment.

Brazil holds the presidency for the G20 this year, with a focus on social inclusion and the fight against hunger; energy transition and sustainable development; and reform of global governance. Ministers and governors will discuss the global economy, financial stability, international taxation, climate, and debt and development. The Chancellor will promote collaboration on issues including addressing inequality, driving growth and progressive taxation.

The UK and Brazil’s relationship is particularly strong in green finance, with Brazil raising $2 billion by listing its new sustainable sovereign bond on the London Stock Exchange. The UK government recently renewed its Memorandum of Understanding with the Brazilian Development Bank on cooperation on the green transition, in particular on green finance. Britain has also made £5 billion available in UK Export Finance funding to meet Brazil’s needs.

The press release issued by HM Treasury on 20 July 2024.

• Chancellor launches landmark review to boost investment, increase pension pots and tackle waste in the pensions system.
• New Pensions Bill confirmed in King’s Speech could boost pension pots by over £11,000, with further consolidation and broader investment strategies to potentially deliver higher returns for pensions.
• An investment shift in defined contribution schemes could deliver £8 billion of new productive investment into the UK economy.
• Action will be taken to unleash the full investment might of the £360 billion Local Government Pension Scheme to make it an engine for UK growth.

The Chancellor Rachel Reeves has announced a landmark pensions review as part of the new Government’s mission to ‘boost growth and make every part of Britain better off’.

Under plans unveiled by the new Chancellor, billions of pounds of investment could be unlocked in the UK economy from defined contribution schemes alone and pension pots for savers in defined contribution schemes could be boosted by over £11,000.

The Review will also, working closely with the Minister of State at MHCLG Jim McMahon, look at how to unlock the investment potential of the £360 billion Local Government Pensions Scheme, which manages the savings of those working to deliver our vital local services, as well as how to tackle the £2 billion that is being spent on fees.

The announcement comes ahead of the first Growth Mission Board on Tuesday. This will be chaired by the Chancellor and drive the Government’s work to achieve the highest sustained growth in the G7. New measures have already been announced to fix the planning system, the creation of a new National Wealth Fund and the overhaul of the listings regime to boost UK stock exchanges.

The work announced today – focusing on investment – is the first phase in reviewing the pensions landscape and will be led by the first ever joint Treasury and Department for Work and Pensions Minister, Emma Reynolds (Minister for Pensions). The next phase of the review starting later this year will consider further steps to improve pension outcomes and increase investment in UK markets, including assessing retirement adequacy.

The Chancellor and the Pensions Minister will chair a roundtable with the pensions industry on Monday to start intensive industry engagement for the Review.

Chancellor of the Exchequer Rachel Reeves said:

Despite a very challenging inheritance, this new Government is getting on with the job of delivering our mandate to get the economy growing so we can make every part of our country better off.

The review we are announcing is the latest in a big bang of reforms to unlock growth, boost investment and deliver savings for pensioners. There is no time to waste. That is why I am determined to fix the foundations of our economy so we can rebuild Britain and improve people’s lives.

Deputy Prime Minister Angela Rayner said:

After putting in years of hard graft serving their communities, the very least our frontline workers deserve – millions of whom are low paid, millions of whom are women – is dignity and security in retirement.

That’s why we want to make sure their hard-earned money works harder for them so we ensure they receive the pensions they have earned, whilst unlocking growth across our economy.

Pensions Minister Emma Reynolds said:

As the first ever joint Treasury and DWP Minister I am uniquely placed to tackle the twin challenges of productive investment and retirement outcomes.

Over the next few months the review will focus on identifying any further actions to drive investment that could be taken forward in the Pension Schemes Bill before then exploring long-term challenges to ensure our pensions system is fit for the future.

There is so much untapped potential in our pensions markets, with an industry worth around £2 trillion. The measures we have already set out in our Pension Schemes Bill will help drive higher investment and a better deal for our future pensioners.

Legal & General Group Chief Executive António Simões said:

As the UK’s largest manager of money for pension clients, we welcome the ambition set out by the government today. Driving pensions capital into areas such as science, technology and infrastructure can help support better returns for millions of retirement savers, as well as stimulate much needed long-term growth for the economy. Having recently launched our own fund offering Defined Contribution savers access to high growth private market sectors, we look forward to continuing to work closely with government on the next stages of reform to help unlock further funding routes to power UK businesses, communities and society. We also strongly welcome the Government’s intention to consider the adequacy of overall pension provision in the next stage of the review.

BVCA Chief Executive Michael Moore said:

We are very encouraged that the Government has brought forward their Pensions Review so quickly. The Chancellor has a real opportunity to deliver economic growth by facilitating increased investment in UK businesses to the benefit of returns to pension savers as well as the wider economy.

Legislative and policy changes, including further consolidation of pension schemes to increase pension schemes’ ability to deploy capital into UK private capital funds are vital, as is greater industry partnership.

The BVCA’s Investment Compact has already brought together over 100 growth equity and venture capital firms committed to working with pensions schemes to consider effective structures that attract investment.

If the Government is ambitious and considers a wide range of options in this review we are optimistic that this will deliver the clear roadmap we have called for, building on the work of the BVCA’s Pensions and Private Capital Expert Panel.

Aviva Director of Workplace Savings and Retirement Emma Douglas said:

We welcome the government’s determination to undertake a pensions review as an early priority. We fully support government’s ambition to get pension funds invested in a way that both supports UK growth and improves outcomes for savers. We see this as an important next step and look forward to working with government and industry on the Review.

Phoenix Group CEO Andy Briggs said:

The announcement of a pensions review by the government is much needed and is welcome news. Phoenix Group has committed to allocate 5% of assets in our default funds to unlisted equities by 2030 which will allow UK savers to invest in a more diversified portfolio. Our key priority is to deliver good outcomes for our customers and we are confident that Phoenix Group could invest up to £40 billion to support the economic growth agenda whilst keeping policyholder protection at its core.

With only one in seven people in the UK saving enough for a decent standard of living in retirement, we are happy to see that this review will expand to look at pension adequacy. This is vitally important for people across the UK and we hope this will include a commitment to increasing auto-enrolment contributions.

Defined contribution schemes will be managing around £800 billion in assets by the end of the decade and the Review will explore ways to increase their investment into productive assets. Even a 1 percentage point shift of assets into productive investments could mean £8 billion of new productive investment to grow the economy and build vital infrastructure by the end of the decade.

This would also help savers using these schemes build up better retirement pots as productive assets are more likely to provide higher returns. Immediate action has already been taken to boost retirement savings through the Pensions Bill, which introduces a Value for Money Framework to promote better governance and achieve higher returns – boosting the pension pot of an average earner who saves over their lifetime in a defined contribution scheme by over £11,000.

The first stage of the review will examine actions to support greater productive investment and better retirement outcomes, including through further consolidation and encouraging at-scale schemes to increase returns through broader investment strategies.

The Local Government Pension Scheme (LGPS) in England and Wales is the seventh largest pension fund in the world, managing £360 billion worth of assets. Its value comes from the hard work and dedication of 6.6 million people in our public sector, mostly low-paid women, working to deliver our vital local services. Pooling this money would enable the funds to invest in a wider range of UK assets and the government will consider legislating to mandate pooling if insufficient progress is made by March 2025.

To cut down on fragmentation and waste in the LGPS, which spends around £2 billion each year on fees and costs and is split across 87 funds – an increase in fees of 70% since 2017, the Review will also consider the benefits of further consolidation.

The first stage of the review will report in the next few months and consider further measures to support the Pensions Bill. It will take account of the need to prioritise gilt market stability, liquidity and diversity. It will then broaden out to consider the wider pensions landscape to strengthen security in retirement. In the meantime, immediate action has been taken through new laws announced to Parliament in The King’s Speech.

Barclays CEO C. S. Venkatakrishnan said:

We welcome the Government’s timely review of the pensions sector. Pensions reforms are critical to unlocking institutional investment in growth equity, and alongside a streamlining of listing requirements, will give a significant boost to UK capital markets and growth. Building institutional demand is also an important signal in encouraging private share ownership.

Association of British Insurers Director General Hannah Gurga said:

This review is an important opportunity to provide much needed long-term strategy for the significant role the UK pensions sector plays in investment and economic growth. We welcome the holistic approach with the interests of savers going hand in hand with further boosting investment in the UK. Good outcomes for savers and providing stability must ultimately be at the heart of the reforms and we look forward to working with the government to achieve this.

M&G plc CEO Andrea Rossi said:

A Pensions Review is long overdue and to be welcomed. M&G has a rich heritage of investing in the UK and there are significant opportunities ahead to give the real economy a boost over the next decade and beyond. We know from experience, through our PruFund offer, that a large pooled fund gives savers access to a wider range of productive assets that aims to maximise benefits over the long-term. Consolidation, combined with the role of advice, has huge potential to align the interests of savers with the UK’s growth ambition. We look forward to supporting the Government on this landmark review.

Border to Coast CEO Rachel Elwell said:

Our focus is on delivering a strong and sustainable LGPS to enable it to pay the pensions of the 6.6 million local government workers in an affordable and sustainable manner.  Through the commitment and support of our Partner Funds, Border to Coast has developed innovative and cost-effective investments, while cutting Private Market fees by almost 30%.   We welcome the opportunity to work with the Government on a co-ordinated review to consider how the LGPS can continue to deliver for hard-working members, generate even greater value to local taxpayers, and deliver productive investment in the UK.

Nest CEO Ian Cornelius said:

Nest members represent a third of the UK workforce. Why wouldn’t we want to help invest in their jobs, their communities, and the infrastructure they use? Nest already invests more than £8.5bn into the UK.  As one of the world’s biggest economies, there are further great investment opportunities available to pension schemes like Nest and we welcome the opportunities being announced to explore increasing investment in the UK.

Pension Protection Fund CEO Michelle Ostermann said:

Pension consolidation, and a fresh approach, can unlock billions in new UK growth-supporting investments and support the UK gilt market whilst securing the retirement incomes of many more pension members.  We welcome the launch of the government’s review, marking the start of an important process, and look forward to playing our part.

Pensions and Lifetime Savings Association Director of Policy and Advocacy Nigel Peaple said:

It is positive the Government has acted quickly to initiate its promised review of our pensions savings system. Pension schemes already invest one trillion pounds in the UK economy, with this amount expected to grow as our defined contribution system matures. With the right regulatory framework and Government action to ensure a healthy pipeline of investible opportunities, we look forward to working with Ministers to create a pension system that works for the country and for savers.

Pensions & Private Capital Expert Panel Chair and co-founder of IQ Capital Kerry Baldwin said:

An early and ambitious review of the pensions landscape is an extremely important step in prioritising returns for UK savers and driving economic growth. The Chancellor’s Pensions Review will add further impetus to the work of the Investment Compact for Venture Capital and Growth Equity, which has brought together the private capital and pensions industries to support pension savers and to encourage investment from pension funds into unlisted equities.

There has been significant progress through this collaboration.  We are already developing a greater understanding of the ways we can work together to deliver new options for UK pension savers at the same time as supporting high growth, innovative UK companies with new sources of capital. The Review offers us the opportunity to develop this shared agenda further and deliver better outcomes for all the stakeholders.

TheCityUK CEO Miles Celic said:

Creating the right investment environment is critical both for improving people’s retirement incomes and for boosting growth across the UK. The government’s new Pensions Review will be an important mechanism to help deliver this. We look forward to working closely with government and regulators to ensure that an effective long-term strategy that supports financial resilience is developed.

Royal London Group Chief Executive Barry O’Dwyer said:

Pensions already play an important role in supporting UK economic growth, and the review announced by the Chancellor is a welcome opportunity to consider reforms that could strengthen this further. We are particularly pleased the review will focus on delivering better retirement outcomes for people, as this must always be the main priority of the pensions system. We are also encouraged that the next phase of the review will examine retirement adequacy, as creating a long-term plan for increasing contributions will have a major impact on improving retirement outcomes and helping to finance growth.

Citi UK CEO Tiina Lee said:

We welcome the Government announcing a pensions review to boost investment in the UK economy.

The UK is home to the second-largest pool of long-term capital in the world. Based on Citi’s experience with global investors, increasing pension fund investment will reinvigorate funding in British companies and infrastructure projects and bring real benefits to our economy and society.

The press release issued by HM Treasury on 18 July 2024.

New law bringing economic stability introduced to the House of Commons following the King’s Speech.

A new law to bring economic stability and help protect family finances introduced to the House of Commons following the King’s Speech.

The new law will mean the Office for Budget Responsibility – the independent watchdog for public finances – will be given the power to make an independent assessment of any single major tax and spending announcement, or series of announcements over the course of a single financial year, which make permanent tax or spending commitments worth more than 1.0% of the UK’s GDP, or around £30 billion.

The Budget Responsibility Bill will ensure that any major future fiscal announcement will be subject to an independent assessment, as a form of ‘fiscal lock’.

The Growth plan set out in 2022, which announced £46bn worth of unfunded tax cuts, led to an unprecedented increase in borrowing costs.

Rachel Reeves, Chancellor of the Exchequer, said:

This Government’s defining mission is to deliver economic growth. However, growth can only come through economic stability and a commitment to sound public money so never again can a government play fast and loose with the public finances.

This new law is part of our plan to fix the foundation of our economy so we can rebuild Britain and make every part of the country better off.

Emergency, temporary measures lasting fewer than two years will not require an OBR assessment, such as the response to the Covid-19 pandemic.

If the government wanted to announce fiscally significant measures but did not ask for an OBR forecast, the fiscal lock would be triggered.

The legislation gives the OBR a new power to independently decide to produce a full fiscal forecast or assessment, at the OBR’s discretion, if they judge the lock has been triggered.

The OBR would alert the Treasury Committee in the event of a breach and notify them of their intent to publish an assessment or updated forecast. Any fiscal event accompanied by an OBR forecast in the usual way will not be subject to the lock.

Louise Hellem, Chief Economist, CBI said:

Market stability is a key foundation to enabling economic growth and business investment. Ensuring large changes in tax and spending policy are always subject to an independent assessment by the Office for Budget Responsibility will give businesses and investors additional confidence in the stability of the public finances.

Growth is the urgent business of the day and fixing our economic foundations at home as well as strengthening the UK’s pitch to the world can rapidly shift UK growth and productivity.

The press release issued by HM Treasury on 21 May 2024.

Fair deal delivers on commitment made within the Northern Ireland Executive’s restoration financial package.

• UK Government delivers on plan to support sustainable public finances and services in Northern Ireland with boost to capital borrowing powers and long-term security of needs-based funding to come into effect this year.
• Interim framework provides further clarity on delivery of funding within the unprecedented £3.3 billion spending settlement confirmed by the UK Government in February.

The UK Government and Northern Ireland Executive have today, 21 May, reached agreement on an interim Fiscal Framework.

Chief Secretary to the Treasury Laura Trott met with Northern Ireland’s Finance Minister Caoimhe Archibald this afternoon to sign the deal, which represents an early and significant step in realising the commitment towards new funding arrangements for the Northern Ireland Executive and investment in its future – as committed in the UK Government’s Northern Ireland Executive restoration financial package and Safeguarding the Union Command Paper.

The deal gives the Executive greater security in funding public services while enabling investment in infrastructure to grow the economy, driving jobs and opportunity across Northern Ireland.

It is headlined by a new needs-based funding formula which will also mean that Northern Ireland will get a 24% uplift in the Barnett formula if its funding falls short of its relative need per head. It also contains an immediate £20 million boost to the Executive’s annual capital borrowing powers, which will rise in line with inflation from 2025-26 onwards.

Chief Secretary to the Treasury Laura Trott said:

This significant deal will provide the Executive with further certainty and resources to deliver for the people of Northern Ireland.

We’ve moved at speed to deliver our plan to address the most pressing issues facing Northern Ireland’s funding and will continue to work with the Executive to secure a fair and final Fiscal Framework made possible by the strength of our Union.

The text agreed between the two governments today also provides further clarity on the new approach to support stability, prosperity, and sustainable public services in Northern Ireland.

The interim Fiscal Framework sets out progress with other elements of the Executive’s restoration financial package. As part of a commitment for the UK Government to write off £559 million in debts incurred while there was a governance gap, the Northern Ireland Executive agreed to publish a plan to deliver sustainable public finances by August 2024. The scope of this plan has now been agreed with HM Treasury ahead of publication in August.

The Executive is also required to publish a comprehensive and costed long-term Strategic Infrastructure Plan by Autumn 2024. The Framework sets out that the Plan will cover the priority areas for action on infrastructure and how it will support prosperity and growth.

A new Public Service Transformation Board, comprising officials from the Northern Ireland Civil Service and UK Government supported by independent experts will provide approval on £235 million ringfenced funding for the purpose of public sector transformation.

Secretary of State for Northern Ireland, Chris Heaton-Harris, said:

Our priority has always been to support the stability and fiscal sustainability of Northern Ireland through a restored Executive.

Today is a significant moment for Northern Ireland and honours this Government’s commitment to a new fiscal framework. It is an example of the better outcomes that are achieved when the UK Government and the Executive work together.

There’s much work to still be done and we stand ready to support the Executive to deliver on the priorities in both this interim framework, and the financial settlement as swiftly and strategically as possible to ensure the full benefits can be realised.

The UK Government and Northern Ireland Executive have committed to agreeing a final Fiscal Framework. Today’s meeting marked the inaugural Joint Exchequer Committee between the two governments. As was committed to within the Safeguarding the Union Command Paper, this will be the forum for discussions on further tax devolution going forward.

Further information

• All documents connected with the interim agreement on the Northern Ireland Executive’s Fiscal Framework and today’s inaugural Joint Exchequer Committee are available online here.

The press release issued by HM Treasury on 10 May 2024.

Major investments have been made in the past week alone.

• Over £2 billion invested by world leading tech companies in the UK this week
• AI firm CoreWeave are investing £1 billion in the UK
• Comes as the Chancellor visits the Siemens Healthineers site, marked for a new factory supporting more than 1,300 skilled jobs

The Chancellor has welcomed the “safe bet” world leading tech and AI companies are making in Britain, as over £2 billion of investment in the UK has been secured in a single week.

Supporting more than 1,300 skilled jobs, Siemens Healthineers have today announced that they are investing £250 million to design and manufacture superconducting magnets for MRI scanners at a new Siemens Healthineers facility in North Oxfordshire.

This comes as world leading AI firm CoreWeave are also investing £1 billion in the UK, as well as confirming their new European Headquarters will be based in the capital.

These two UK data centres will be opened in 2024, with a further expansion planned in 2025, helping secure the necessary processing power for machine learning and AI, graphics and rendering, life sciences and real-time streaming.

This £2 billion investment also follows Scale AI, the data infrastructure company for AI, selecting London as the location for its first European headquarters.

Earlier this week, Wayve announced they had secured over $1.05 billion to develop the next generation of AI-powered self-driving vehicles in the UK.  Founded in the UK in 2017, Wayve is a home-grown British success story and a testament to the UK’s global leadership in creating the economic and regulatory conditions for start-ups in the AI and self-driving vehicle industries to grow and thrive.

Chancellor of the Exchequer Jeremy Hunt said:

Businesses are making a safe bet in Britain. We have attracted the third highest amount of greenfield foreign direct investment since 2010 and the UK accounts for around half of all AI private capital investment in Europe. We really are turning a corner, and the businesses of the future agree.

The UK accounts for around half of all AI private capital investment in Europe and hundreds more AI companies are starting up in the UK every year, growing our economy and creating highly-skilled, well-paid jobs. The AI sector employs more than 50,000 people in the UK and contributes more than £3.7 billion to our economy every year. By 2035, our AI market is forecast to grow to over $1 trillion.

Taken together, these investments cement the UK’s position as a world leader in the AI and tech industry and builds on our strong record of attracting the best and biggest investments from world leading AI companies.

Bernd Montag, Chief Executive of Siemens Healthineers said:

MRI technology plays a vital role in diagnosing disease, helping patients to get healthy and stay healthy. As a world leader in medical imaging, we are very proud to open the next chapter of our history here in Oxford.

This factory will be the global centre for our innovative low-helium magnet technology, meaning we consume far less of a scarce natural resource and enable access to MRIs for many more patients.

Mike Intrator, Cofounder and Chief Executive Officer, CoreWeave said:

We are seeing unprecedented demand for AI infrastructure and London is an important AI hub that we are investing in. Expanding our physical footprint in the UK is an important milestone in the next phase of CoreWeave’s growth.

CoreWeave’s infrastructure will fill a void in the cloud market by providing AI enterprises with localized high-performance compute solutions that will help build and deploy the next generation of AI applications.

Secretary of State for Science, Innovation, and Technology Michelle Donelan said:

I have always said that the proof will be in the pudding when it comes to cementing the UK’s place as a technology superpower – and there is no better proof than the fact that our tech sector has received £2billion of private investment in a single week! Time and again, world leading tech companies are choosing the UK to invest in – bringing new jobs and opportunities for people to gain valuable skills.

Siemens, Wayve, CoreWeave, ScaleAI – these are major players that countries all across Europe and the world are keen to attract. Yet it is our unique, agile and highly-ambitious tech ecosystem that I have proudly helped to build that is winning the race for the UK.

Some of the world’s biggest AI companies including Open AI and Anthropic have also chosen London as the base for their first international offices in a huge vote of confidence in our approach to AI. Microsoft recently announced a new AI hub in London, and one of the leaders in the field, Google DeepMind was also founded here over a decade ago and remains in the UK to this day.

We also have a world-leading AI and tech industry in the UK which is continuing to grow. The UK is only the 3rd country (behind the US and China) in the world to have a tech sector valued at over $1 trillion in total. The UK is also home to 3rd highest number of AI companies and private capital investment in AI in the world.

The single biggest way we’re backing businesses is by creating the economic conditions for them to thrive, which is why we have worked with the Bank of England to reduce inflation from over 11.5 to 3.2%, this means that wages have been rising faster than inflation for nine months in a row.

Because the economy has turned a corner we can cuts taxes, including our cuts to National Insurance worth £900 for the average worker, and full expensing which effectively cuts corporation tax by more than £50 billion to help firms invest for less – the biggest business tax cut in modern British history.

Further information

• CoreWeave is a specialized GPU cloud provider, designed to power the most complex workloads with customized solutions at scale. The company’s portfolio of cutting-edge technology delivers a broad range of capabilities for machine learning and AI, graphics and rendering, life sciences, real-time streaming, and more. Its world-class teams, talent, and engineering prowess bring unmatched speed-to-market for advanced compute. CoreWeave operates a growing footprint of data centres covering every region of the US. It was founded in 2017 and is based in New Jersey.
• Siemens Healthineers pioneers breakthroughs in healthcare. For everyone. Everywhere. Sustainably. The company is a global provider of healthcare equipment, solutions and services, with activities in more than 180 countries and direct representation in more than 70. As a leading medical technology company, Siemens Healthineers is committed to improving access to healthcare for underserved communities worldwide and is striving to overcome the most threatening diseases. The company is principally active in the areas of imaging, diagnostics, cancer care and minimally invasive therapies, augmented by digital technology and artificial intelligence. In fiscal 2023, which ended on September 30, 2023, Siemens Healthineers had approximately 71,000 employees worldwide and generated revenue of around €21.7 billion.
• Further information on the Wayve investment.
• Further information on the Scale AI European headquarters.

The press release issued by HM Treasury on 23 April 2024.

Investing in defence companies contributes to our national security, defends the civil liberties we all enjoy, while delivering long-term returns for pensions funds and retail investors.

That is why the UK’s world leading investment management industry supports our defence sector, with the Investment Association’s members having invested £35 billion in UK defence companies.

Investing in good, high-quality, well-run defence companies is compatible with ESG considerations as long-term sustainable investment is about helping all sectors and all companies in the economy succeed.

The press release issued by HM Treasury on 19 April 2024.

UK Chancellor Jeremy Hunt chaired a meeting of the “Five Finance Ministers” of Australia, Canada, New Zealand, the United Kingdom and the United States.

The meeting was hosted by Secretary Janet L. Yellen at the U.S. Department of the Treasury yesterday alongside the IMF and World Bank Spring Meetings.

Finance Ministers exchanged views on shared economic security priorities and the common economic risks and vulnerabilities faced by partners and the global economy from overconcentrated supply chains.

They discussed the importance of resilience building measures in mitigating the economic risks resulting from these challenges and underscored the role of Finance Ministers in increasing resilience, promoting stable global supply chains, and supporting global growth.

They also reaffirmed their commitment to continued cooperation to respond to joint economic challenges and looked forward to future meetings of the group deepening collaboration on these shared priorities.

Speaking after the meeting, Chancellor Jeremy Hunt said:

We must not be complacent. In light of the legacy of the pandemic and the instability from the current conflicts, the value of working together to tackle the economic risks we face and build our collective resilience cannot be ignored.

The press release issued by HM Treasury on 18 April 2024.

Consultation on VAT relief on everyday charitable donations will be launched before 23 July 2024.

• New VAT relief to encourage businesses to donate everyday items to charity will be consulted on
• Currently firms do not pay VAT if goods are sold on, however, if distributed free of charge VAT must be accounted for
• 12 week consultation to be launched before 23 July 2024

A new VAT relief to encourage businesses to donate everyday items to charity will be consulted on, the Treasury’s tax minister Nigel Huddleston has announced today (18 April 2024).

Currently firms do not pay VAT on any goods they donate which are then sold on, such as clothes, hygiene supplies and cleaning products. However, if these goods are not sold but are instead distributed free of charge to those in need VAT must be paid for.

The Treasury has today announced it will consult on a new VAT relief for donations of low value household goods to help encourage donations.

Nigel Huddleston, Financial Secretary to the Treasury said:

We want the tax system to support donations to charity, not work against it.

We are consulting on how a VAT relief might boost donations so we can get more items we all rely on everyday to those in need and help to alleviate poverty.

Donations that could be in scope of the proposed new VAT relief could include anything that may be of use to a household, such as:

• hygiene items (soap, toothpaste, toothbrushes, shower gel, toilet rolls)
• second hand items from hotels (such as sheets, kettles)
• cleaning supplies – including laundry detergent

Helen Dickinson OBE, Chief Executive of the British Retail Council, said:

Following our representations to government, we welcome the consultation into the unequal tax treatment of goods for onward sale compared to those being donated directly to those in need. We hope that the consultation will result in a meaningful change that will boost the charitable work of business in this country.

Andy Scott, Principal Tax Adviser, Confederation of British Industry said:

We welcome the government’s announcement to consult on a new VAT relief for charitable donations of everyday items. This progressive step aligns with our calls for a smart tax system that incentivises corporate social responsibility and cuts red tape for businesses wanting to contribute their unsold stock to good causes.

By removing the VAT penalty on donated goods, businesses will be more encouraged to support the growth of the civil society sector and the circular economy.

The proposed VAT relief will lower the cost of generosity, allowing firms to extend their social impact without the deterrent of an additional tax expense or the administrative burden of valuing donated goods. We look forward to working with the government to shape a relief mechanism that maximises the potential for positive change in our communities and simplifies the tax system.

A barrier to businesses donating goods to charities for distribution to people in need has grown over recent years as firms have had to account for VAT on donations which are not for onward sale.

The Treasury announced today that it will launch a 12-week consultation before 23 July 2024. It will consult on introducing a UK-wide VAT relief for a range of low value household goods which businesses donate to charities to give away free of charge to people in need. The conclusion to the consultation will be announced at a future fiscal event.

Further information

• The new VAT relief will not include goods which are donated to charities for them to use, such as new IT equipment. This is to prevent VAT avoidance. For example the commercial arm of an organisation buying equipment then donating them to a charitable wing to avoid VAT. The consultation will seek views on this.
• VAT is the UK’s third largest tax, forecast to raise £171 billion in 2023/24. Taxation is a vital source of revenue which helps to fund the UK’s schools, hospitals, and other essential services that we all rely on. VAT has been designed as a broad-based tax on consumption, and any relief requests must be carefully considered and balanced against the need to manage the public finances in a disciplined and responsible way by targeting support where it is most needed.
• Today’s announced forms part of today’s Tax Administration and Maintenance Day. Further details can be found in the full Written Ministerial Statement.