Tag: Treasury

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.

The press release issued by HM Treasury on 30 September 2024.

Government sends remit letters to independent Pay Review Bodies, launching 2025/26 pay award process.

In writing to the independent Pay Award Bodies, the Government has today formally launched the 25/26 pay process for the Armed Forces, NHS workers, teachers, police officers, prison service staff, the NCA and senior public sector staff.

These bodies, made up of experts from across these areas, will now go on to collect evidence to inform their independent pay award recommendations. These will then be submitted for the Government to formally respond to.

By bringing forward the pay round this year, the Government plans to fully reset the timeline by the 2026/27 round.

The Government has now sent remit letters to the below independent Pay Review Bodies, which is the standard method for launching the 2025/26 pay award process:

Armed Forces’ Pay Review Body (AFPRB)
National Crime Agency Remuneration Review Body (NCARRB)
NHS Pay Review Body (NHSPRB)
Police Remuneration Review Body (PRRB)
Prison Service Pay Review Body (PSPRB)
Review Body on Doctors’ and Dentists’ Remuneration (DDRB)
Review Body on Senior Salaries (SSRB)
School Teachers’ Review Body (STRB)

The press release issued by HM Treasury on 30 September 2024.

HM Treasury has announced today that Nina Hingorani-Crain has been reappointed as a Non-Executive Director to the Board of NS&I (National Savings and Investments), as of 1 November 2024. The reappointment will be for a term of three years.

Non-Executive Directors on NS&I’s Board ensure a sound strategy is in place to meet the organisation’s remit of raising cost-effective debt financing for the government. They also act as an external source of advice, have oversight of risk control, and ensure NS&I’s links with its outsourcing partners remain open and transparent.

NS&I is one of the largest savings organisations in the UK, offering a range of savings and investments. All products offer 100% capital security because NS&I is backed by HM Treasury.

Nina was first appointed as a Non-Executive Director in November 2021. She has held a number of high-profile executive and non-executive roles, including as Chief of Staff and Principal Private Secretary to the Chair of the Financial Services Authority (FSA) during the global financial crisis and as Chief of Staff leading the transition of the FSA into the Financial Conduct Authority, the current financial services regulator. She is currently on the Board of Nest (the workplace pension scheme set up by the UK government), a London mental health and community health NHS Foundation Trust, and the Institute of Chartered Accountants in England and Wales (ICAEW). She has previously served on the Board of the Charity Commission for England & Wales, and the Boards of several other national and regional organisations.

Further information:

The reappointment has been made in accordance with the Code of Practice published by the Commissioner for Public Appointments.

All appointments are made on merit and political activity plays no part in the selection process. However, in accordance with the original Nolan recommendations, there is a requirement for appointees’ political activity (if any declared) to be made public. Nina Hingorani-Crain has confirmed that she has not engaged in any political activity in the last five years.

The press release issued by HM Treasury on 27 September 2024.

OFSI announces monetary penalty for breaches of UK financial sanctions imposed on Russia linked to its illegal invasion of Ukraine.

The Office of Financial Sanctions Implementation (OFSI) has issued a monetary penalty to Integral Concierge Services (ICSL) for breaches of the financial sanctions regime imposed on Russia in response to its illegal invasion of Ukraine in 2022.

The monetary penalty relates to the property management service ICSL provided to a designated person subject to an asset freeze. Between 2022 and 2023, ICSL made or received 26 payments in connection with the services they were providing to the designated person, despite knowing or having reasonable cause to suspect these were in breach of financial sanctions in the UK.

As a result of these breaches, ICSL was given a penalty of £15,000. ICSL did not challenge the penalty and paid in full.

This penalty demonstrates OFSI’s clear commitment to pursuing financial sanctions breaches wherever they occur. From the largest institutions to the smallest, everyone has an obligation to comply with the UK’s financial sanctions regime. OFSI is prepared to utilise the full extent of its legislative powers to pursue those who commit serious breaches of financial sanctions.

This case was not reported to OFSI by the subject of the penalty, resulting instead from a proactive investigation.

FCDO Sanctions Minister Doughty said:

We are firmly committed to enforcing the UK’s financial sanctions regime. We promised this government would act – and we are putting those involved in breaches on notice. Let this be a strong warning to those who fail to comply.

The UK is continuously working to proactively identify breaches and strengthen our enforcement powers. We will continue to close loopholes, come down hard on sanctions evaders, and crack down on sanctions circumvention to ensure the effectiveness of sanctions against Putin’s Russia, and in the case of other sanctions regimes.

The monetary penalty highlights key lessons for industry, particularly firms involved in the property management sector. This case demonstrates the importance of understanding and taking appropriate action to address financial sanctions risks arising from your business model and client base, particularly if they present heightened sanctions risks. Firms should seek professional advice on their sanctions obligations wherever necessary.

Russia is desperate to get around our sanctions and we will not hesitate to take action against those involved in supplying and funding Putin’s war machine. The government is committed to significantly strengthening our sanctions enforcement, and will continue to prioritise sanctions enforcement at every turn. This includes both public actions, such as monetary penalties, and actions which are not made public, such as warning letters and referrals to regulators. Following the introduction of strict civil liability for financial sanctions breaches in June 2022, OFSI is now also able to take action regardless of whether a person knew or had reasonable cause to suspect they would be in breach.

The press release issued by HM Treasury on 24 September 2024.

Thousands of young people could have £2,200 sitting unclaimed in their Child Trust Fund account.

• Young people urged to claim their Child Trust Fund
• £2,200 on average waiting in unclaimed accounts

More than 670,000 18-22 year olds yet to claim their Child Trust Fund are reminded to cash in their stash as HM Revenue and Customs (HMRC) reveals the average savings pot is worth £2,212.

Child Trust Funds are long term, tax-free savings accounts which were set up, with the government depositing £250, for every child born between 1 September 2002 and 2 January 2011. Young people can take control of their Child Trust Fund at 16 and withdraw funds when they turn 18 and the account matures.

The savings are not held by government but are held in banks, building societies or other saving providers. The money stays in the account until it’s withdrawn or re-invested.

If teenagers or their parents and guardians already know who their Child Trust Fund provider is, they can contact them directly. If they do not know where their account is, they can use the online tool on GOV.UK to find out their Child Trust Fund provider. Young people will need their National Insurance number – which can be found easily using the HMRC app –  and their date of birth to access the information.

Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said:

Thousands of Child Trust Fund accounts are sitting unclaimed – we want to reunite young people with their money and we’re making the process as simple as possible.

You don’t need to pay anyone to find your Child Trust Fund for you, locate yours today by searching ‘find your Child Trust Fund’ on GOV.UK.

Third-party agents are advertising their services offering to search for Child Trust Funds and agents will always charge – with one charging up to £350 or 25% of the value of the savings account.

Using an agent can significantly reduce the amount received, is likely to take longer and customers still need to supply them with the same information they need to do the search themselves.

Gavin Oldham, The Share Foundation, said:

If you are 18-21 years old, the government would have put money aside for you shortly after birth. This investment would have grown quite a bit and it’s in your name. The Share Foundation has linked over 65,000 young people to their Child Trust Fund accounts. It’s easy and free to find out where your money is. Go to  findCTF.sharefound.org or GOV.UK to locate it today.

In the last year more than 450,000 customers, with just their National Insurance number and date of birth, used the free GOV.UK tool to locate their Child Trust Fund.

More information on Child Trust Funds and how to access your savings can be found on GOV.UK.

Further Information

Latest figures for Child Trust Funds included in the Annual Savings Statistics  were released on 19 September 2024 and include figures up to April 2024.

The Child Trust Fund scheme closed in January 2011 and was replaced with Junior Individual Savings Accounts (ISA).

If a parent or guardian was not able to set up an account for their child, the government opened a savings account on the child’s behalf.

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

The Chancellor has today unveiled a package of measures to deliver on the agenda of the new government.

The Chancellor has today unveiled a package of measures to deliver on the agenda of the new government including a breakfast club pilot for 750 schools with primary aged pupils, new powers for the Covid Corruption Commissioner, e-invoicing to support business and the next steps on the government’s industrial strategy.

School Breakfast Club Pilot

The Chancellor announced that up to 750 schools with primary aged pupils will be invited to take part in a £7 million breakfast club pilot. The funding will allow these schools to run free breakfast clubs for their pupils in the summer term (April-July 2025).

The Department for Education will work with the schools selected as part of the pilot to understand how breakfast clubs can be delivered to meet the needs of schools, parents and pupils when the programme is rolled out nationally.

This will help reduce the number of students at schools with primary aged pupils starting the school day hungry and ensure children come to school ready to learn. It will also support the government’s aim to tackle child poverty by addressing rising food insecurity among children.

Covid Corruption Commissioner

Reeves also announced a block on any Covid-era PPE contract being abandoned or waived until it has been assessed by the new Covid Corruption Commissioner, whom will be appointed in October.

The decision will affect £647 million of Covid PPE contracts where contract recovery was previously earmarked to be waived.

It follows action already in motion to cut government waste and curb unnecessary spending. In her statement to Parliament in July, the Chancellor pledged to halve government consultancy spend from 2025-26, with savings targets of £550 million this financial year and a further £680 million in the next already announced.

Excessive use of ministerial travel by aeroplane and helicopter is also being cutdown, with confirmation that a military contract for a helicopter also used for VIP trips, is not being renewed at the end of the year as previously announced.

Industrial Strategy

The Chancellor also today announced that the Industrial Strategy will be at the heart of the government’s mission to grow the economy, unlock investment and make every part of the country better off. It will focus on delivering long-term change to the economy by making Britain a clean energy superpower and accelerating to net zero, breaking down barriers to regional growth, and building a secure and resilient economy.

A green paper will be published around Budget in October outlining the long-term sectoral growth and priority industries of the government, ahead of the final strategy published in the spring of 2025 following a consultation with business.

HMRC package

Chancellor Reeves also outlined a package of reforms to improve the UK’s tax system to help fix the foundations of the UK economy.

As part of the package, HMRC will soon launch a consultation on electronic invoicing (e-invoicing) to promote its wider use across UK businesses and government departments.

The introduction of e-invoicing can significantly reduce administrative tasks, improve cash flow, boost productivity, introduce automation, and reduce errors in tax returns – all helping to close the tax gap. The consultation will gather input from businesses on how HMRC can support investment in and encourage e-invoicing uptake.

The Chancellor also announced that Exchequer Secretary to the Treasury James Murray, the minister responsible for the UK’s tax system, has become the Chair of the HMRC Board. This is to help oversee the implementation of his three strategic priorities for HMRC; closing the tax gap, modernising and reforming, and improving customer service.

It was also announced that a new Digital Transformation Roadmap, aimed to be published in Spring 2025, will set out HMRC’s vision to be a digital first organisation underpinned by customer insight. The Roadmap will include measures to ensure digital inclusion and support for customers who cannot yet interact digitally.

There was a further update that new staff are expected to join HMRC’s training programme in November as 200 additional offer letters have been issued as part of the 450 letters already sent. This is part of HMRC’s plans to recruit an additional 5,000 compliance staff to help close the tax gap.

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

Rachel Reeves leads government backing of the Invest in Women Taskforce, which aims to create one of the world’s largest investment funding pools aimed solely at female founders.

Female business founders to get the Chancellor’s backing as Rachel Reeves puts her weight behind the Invest in Women Taskforce – which aims to create one of the world’s largest investment funding pools for female founders – as she pushes forwards the government’s mission to grow the economy.

The Invest in Women Taskforce is the successor to the Rose Review, an independent review of female entrepreneurship which found that a £250 billion boost could be added to the UK economy if women started and scaled their businesses at the same rate as men.

Support for women and their contribution to the economy is a personal priority for Reeves as Britain’s first female Chancellor. The core aim of the Taskforce is to establish a funding pool of more than £250 million for female-founded businesses through private capital, making it one of the world’s largest investment funding pools aimed solely at female founders. As well as backing the Invest in Women Taskforce, the Chancellor will take an active role in steering its priorities and objectives as well as attending Taskforce meetings and events.

To mark this and celebrate the key role played by female business leaders in all parts of the economy, on International Equal Pay Day, the Chancellor – in partnership with women’s rights charity the Fawcett Society – is hosting a reception in No.11 Downing Street this evening.

At the evening reception, Chancellor Reeves will convene a group of female business leaders from across Britain’s foremost growth industries, such as financial services and technology as well as the creative sector.

She will set out their importance to the government’s number one priority mission for growth and champion their part in its delivery. She also will set out her agenda for women in the economy, vowing to improve the economic opportunities available to women and close the gender pay gap once and for all. That includes strengthening rights at work and investing in childcare.

Rachel Reeves, Chancellor of the Exchequer, said:

It is a huge responsibility to sit in the Treasury as the first female Chancellor of the Exchequer and be able to use my position to improve life for women across the UK – one that I don’t take lightly.

That includes ending the gender pay gap, strengthening rights at work and investing in childcare. And by backing the Invest in Women Taskforce we can establish one of the world’s largest dedicated investment funding pools for female-powered businesses, helping grow our economy.

This event gathers together some very powerful women but the truth is, everyone can do something for women’s equality – whether that’s supporting the women and girls in their lives with their ambitions or making their workplace a fairer playing field.

With 5.5 million businesses driving the UK economy, entrepreneurship is the lifeblood of the UK’s economic growth. While women make up over 50% of the population, they represent only 21% of business owners, with less than 6% of active equity backed companies founded by women. The Invest in Women Taskforce, alongside other government initiatives including the Women in Finance Charter which encourages female representation in financial services, aims to change this.

The event comes ahead of the International Investment Summit next month, at which the Chancellor is working to ensure there is strong female representation both in terms of agenda and attendance.

The Department for Business and Trade has also published its annual Investing in Women Code report today, which finds that venture capital fund managers who have signed up to the Code are more likely to invest in female founders.

The report also shows that the 250 signatories of the Code are leading the way in addressing the finance gap between male and female entrepreneurs. 32% of all venture capital deals made by Investing in Women Code signatories were in female-founded companies last year, compared to the market average of 28%, revealed in the latest report published today. This is the fourth year in a row that Code signatories have outperformed the wider market.

The Investing in Women Code was founded in 2019 as a landmark government-led initiative in response to the Rose Review’s findings that a lack of funding was one of the most significant barriers to women seeking to effectively scale a business. It is a commitment from finance providers to female founders, with signatories now including the British Business Bank, British Private Equity & Venture Capital Association (BVCA), UK Business Angels Association (UKBAA), UK Finance, and Responsible Finance. Investing in Women Code signatories account for 40% of UK Business Angels Association angel investment groups and 47% of venture capital deals.

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

New rules for banks and building societies announced today will ensure the UK financial system is resilient, competitive and promotes investment in the UK economy.

The Basel 3.1 reforms are the final part of the internationally agreed Basel 3 framework. Today’s proposals, announced by the Prudential Regulation Authority (PRA), mark the end of the post-2008 crisis capital reforms and give the certainty industry will need to invest for growth.

Chancellor of the Exchequer Rachel Reeves welcomed the reforms, saying they would deliver certainty for the banking sector to “finance investment and growth in the UK” ahead of a joint meeting with the Bank of England Governor to discuss them with CEOs of the UK’s largest banks and building societies in No11 Downing Street.

Chancellor of the Exchequer Rachel Reeves said:  

Today marks the end of a long road after the 2008 financial crisis.

Britain’s banks have a vital role to play in helping businesses to grow, getting infrastructure built and supporting ordinary peoples’ finances.

These reforms will strengthen the resilience of our banking system and deliver the certainty banks need to finance investment and growth in the UK.”

Economic Secretary to the Treasury Tulip Siddiq said: 

These new rules bring the UK in line with international standards while supporting the dynamism of the UK economy.

This is a balanced package that promotes the competitiveness of the UK banking system as well as economic growth.”

The PRA’s new rules, including those already announced in December 2023, have both financial resilience and growth at their core, reflecting an increased focus on growth and competitiveness.

Banks and building societies will have to maintain sufficient capital against risks, such as loans not being repaid, to protect people and businesses from the fallout from a 2008-style financial crash.

The PRA’s near-final rules also include a number of changes from its initial proposals that will support economic growth and competitiveness. The key changes made by the PRA will:

• Lower its proposed capital requirements for lending to small and medium-sized businesses (SMEs). This will mean lending to SMEs continues to be supported, helping to deliver the government’s ambition to make the UK the best place in the world to start and grow a business.
• Lower its proposed capital requirements for infrastructure projects, ensuring no increase on current requirements and supporting the UK’s transition to net zero.
• Streamline the approach banks can take to mortgage lending, by simplifying the approach to valuing residential property.

The PRA’s new rules will come into force on 1 January 2026, providing the banking sector with the certainty it needs to prepare for the new requirements. The Treasury will repeal the legislation required for the PRA to move forward with the Basel 3.1 package.

The PRA published proposals for a simpler regime for smaller firms alongside its near-final Basel 3.1 rules. This regime will make it easier for smaller banks and building societies to lend by minimising the number of calculations they are required to make and introducing a single capital buffer.