Jeremy Hunt MP: speeches

Speeches

• 8 Sept 2026 · Public Sector Productivity · Hansard source

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  May I welcome the Chief Secretary to the Treasury to her new role? If she has any questions, may I recommend an excellent book by a former Chancellor, which has a number of tips? [ Laughter. ] The public sector is 20% of our national output, so it offers a major opportunity for the Government to improve our national productivity. Was it wise to give the ASLEF train drivers on the Avanti West Coast route an above-inflation pay rise without any apparent productivity quid pro quo? With the public finances so tight, should the rule not be that above-inflation increases must have productivity gains sitting alongside them?

• 1 Sept 2026 · UK Financial Services · Hansard source

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  It is a pleasure to speak under your chairmanship, Mr Twigg. I speak today as chairman of the all-party parliamentary group for financial markets and services. I refer hon. Members to my entry in the Register of Members’ Financial Interests, which states that I accept speaking engagements from financial services companies. I thank the hon. Member for Buckingham and Bletchley (Callum Anderson) not just for securing this debate, but for an excellent opening speech. He has a background in the City—in the stock exchange and working for the City of London corporation—which is probably unusual in his party. I thank him for deploying his expertise, because it is incredibly important for UK financial services that the world sees that there are experts in financial services on both sides of the House. I particularly welcome his comments today. I welcome the Economic Secretary to the Treasury back to her role, which she carried out previously with great distinction. She has always engaged extremely constructively when it comes to the interests of the City and financial services. I know that her return to that post was widely welcomed. It is also a pleasure to speak alongside my hon. Friend the Member for Wyre Forest (Mark Garnier)—an old friend—who himself has a background in the London stock exchange. After the financial crisis in 2008, financial services had a pretty bad name. The Government had to put up around £1 trillion to support the sector. Chief executives of banks made very ill-judged decisions to continue paying themselves large bonuses at a time when the rest of the country was suffering, and the country suffered a longer and deeper recession at that time as a result of our exposure to the financial services sector, which was much greater than that of our peers. We learned many painful lessons in that period. As well as the financial crisis, the sector had to deal with the loss of passporting rights post-Brexit. Despite those body blows, the sector employs 2.5 million people—more than at the time of Brexit—and two thirds of the jobs are outside London. It is worth around 11% of our national output. It generates more than £110 billion in tax revenues, which is more than any other single sector. Put another way, it funds more than half the cost of running the NHS. Whatever one’s interest in financial services, from a fiscal perspective alone they simply cannot be ignored. The sector is also thriving today in very challenging circumstances. The City think-tank Z/Yen tracks the competitiveness of global financial service hubs. In 2020, London trailed New York. Now it has caught back up. It remains the world’s premier centre for foreign exchange and specialist insurance. It helps to make the UK the world’s second largest services exporter. When I was Chancellor, I introduced the Edinburgh and Mansion House reforms to support this important sector. Regulations, including listing rules, were simplified and the mighty task of making our pension fund industry fit for purpose was started. To their credit, this Government have built on those reforms with the Leeds reforms, the Pension Schemes Act 2026 and the forthcoming Financial Services and Markets Bill, all of which are extremely welcome. But, as the hon. Member for Buckingham and Bletchley said, our competitors are not standing still. With smart policies, our financial services sector could do even more for growth in the UK. Easy access to finance, alongside having the most respected universities in the world outside the United States, has helped to create, for example, the world’s third-largest tech ecosystem. In artificial intelligence, the UK has the potential to be the world’s next silicon valley. If we get there, easy access to finance will have played a major role in making that possible. What needs to happen next? The first thing is to do no harm—in particular, to do no harm with additional taxes in October’s Budget that could potentially damage the sector. Uniquely, the UK already charges higher corporation tax to banks. Total bank taxes are about 45% here, compared with 32% in Dublin and 28% in New York. I totally understand the temptation—finances are extremely tight, and the banks have few friends—but international capital is mobile, and hiking taxes further will mean that the sector ultimately generates less tax revenue, not more, for the Chancellor. Secondly, we need to make regulation in UK financial services more proportionate. Consumer protection really matters, but we cannot eliminate all risk, which is what our regulators sometimes appear to be trying to do. Compliance now costs the sector more than £39 billion a year—about 13% of operating costs. We should aim to at least halve that using the new international competitiveness and growth objectives, which the Financial Conduct Authority should apply to authorisation, supervision and enforcement decisions.

• 1 Sept 2026 · UK Financial Services · Hansard source

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  I thank the hon. Lady for her role in helping to salvage Barings. I did not know that before. She is absolutely right to raise that issue. I do not say this in a party political way, because my party pretty much supported it at the time, but there is no doubt that, in the run-up to the financial crisis, regulation was not as tight as it needed to be. That is one of the reasons why we needed such expensive rescue missions for the banks. Since then, regulation has made the UK financial services sector much more secure. The Prudential Regulation Authority and the sector as a whole are very resilient. In one of my most difficult moments as Chancellor, one of the most reassuring things that happened was that the Governor of the Bank of England said to me, “This sector is solid. You don’t have to worry. We are in a much, much better state than we were in 2008.” But I do think that it has gone slightly too far in the other direction. Sometimes we can over-correct. Particularly when it comes to consumer risk, there is a danger that we restrict consumer choice by being over-restrictive about the products that banks and financial services companies can offer. That is not to say that we want a free-for-all but, in terms of competitiveness, we need to keep a weather eye on the relative burdens of our regulatory regime, compared with those in other places. I echo what the hon. Member for Buckingham and Bletchley said about AI, tokenisation and digital identity. The UK legal system is widely respected, and this is an area where good regulation could attract a lot of investment. We really could be leaders in it. London should be the world’s most trusted centre for tokenised wholesale finance, with clear rules for tokenised securities, custody settlement, digital money and market infrastructure. We also need to speed up the consolidation of the pension industry, not least, as the hon. Member for Buckingham and Bletchley said, to encourage more investment in UK infrastructure, equities and tech start-ups. If that was done in a sensible, controlled way and as part of a balanced investment strategy, the returns for pensioners would be much higher than they currently are. That would start to stem the tide of British unicorns, of which we have more than Tokyo, Paris and Berlin put together, but which invariably at the moment tend to go to New York when they want to IPO, rather than doing it in the UK. The fifth thing we could do is to encourage more saving. If we are going to transform the way this country grows, we need an investment-led growth strategy, not just a consumption-led growth strategy. Although it is painful for me to say this, scrapping our crazy system of giving people a new pension pot for every job, and instead copying the Aussies’ pension system—giving everyone one pension pot that follows them around for their whole lives, but with the freedom to change provider whenever they want—would make saving much simpler. It would mean people could go into an app on their phone and immediately see the value of their pension pot. It would encourage them to top up their pension pots if they were able, perhaps because of an inheritance or whatever. The impact of doing that in Australia has been that they save more, they get better returns, and there is much fiercer competition to attract those savings in the domestic pension fund industry. I know that everyone here today will agree with this, but I think it needs to be said: it is imperative, whatever the pressures, to keep Britain open to the world. Our advantage has always been our openness. We are at our strongest when we connect global capital, trusted law, deep markets and world-class professional services all together. That means the painful, often boring, but absolutely vital work of negotiating trade deals, securing digital market access, agreeing mutual recognition deals, and making sure we have proper mobility for talent. I am really grateful to the Minister for coming today, and would ask her to briefly address the following questions. When he is considering measures for the Budget, will the Chancellor of the Exchequer keep the competitiveness of the City and financial services central to his considerations? Will the Government undertake a review of the UK’s international tax competitiveness, particularly when it comes to financial services? Will she set out some specific steps that the FCA and PRA can take to deliver their competitiveness and growth objectives? What further reforms will the Government bring forward to help London to become the world’s leading centre for tokenised finance? What progress has been made in further unlocking pension fund investment into productive UK assets? What further action will the Government take to improve access to finance for small and medium-sized enterprises and scale-ups, which has been a particular issue in the period since the financial crisis? Finally, does the Minister agree that maintaining the UK’s position as a leading global financial centre should be treated as a core element of the UK’s growth strategy? The prize, if it is, is absolutely enormous. TheCityUK says that we could add £53 billion to our additional annual output by 2035. That is the entire output of the life sciences sector, and would generate about £22 billion of extra tax revenues—around the entire budget for the police or the Department for Transport. The opportunity is huge. The question is whether we have the political will to get there by going further and faster.