Mark Garnier MP: speeches

Speeches

• 1 Sept 2026 · UK Financial Services · Hansard source

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  It is a pleasure to serve under your stewardship, Mr Twigg. I thank the hon. Member for Buckingham and Bletchley (Callum Anderson) for securing this debate. He speaks with great authority, and it is refreshing to hear a positive vision of the financial services sector, especially given his experience working for the London Stock Exchange Group. He raised a number of points, some of which I will deal with in my speech. The hon. Member raised some interesting points that are strongly related. The first was the lack of growth capital and the fact that we are not seeing a huge amount of money invested into the UK by UK pension funds. Companies looking for growth capital seem to go to places such as America, where they can do better. He also talked about the undervaluation of the UK stock market, which is part of that problem, as well as clean energy and the fantastic opportunity it provides for investment in long-term patient capital. It is interesting that, during the passage of the Pension Schemes Act, one complaint thrown up by a very large annuity asset manager was that it wanted to invest in the equity of wind farms, where there is a predictable income because of contracts for difference, but the Pensions Regulator would not allow it because it had to be invested in bonds, which have a more liquid market. Although the Conservatives completely support the Mansion House compact and the Mansion House accord, there is too much stuff getting in the way. We had a long debate on this during the passage of the Pension Schemes Bill, now an Act. We are trying to work with the Government on how not just to force more money into the UK equity market, but to clear away the clag that gets in the way of investments. That comes to the point about regulation and the regulatory environment. I will discuss more of the hon. Member’s points in the main thrust of my speech, but I wanted to get that point over early on. As we heard from my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt), the financial services sector matters hugely to the UK. It is often described as the engine room of our economy, for two good reasons. The first is that the banking sector provides the plumbing that moves finance around our economy, making sure that money, where it is accumulated through wealth, is distributed to people who need it. The second is our international position: the financial services sector generates 11% of national economic output and contributes £12 in every £100 of tax paid—it pays for a lot of the NHS. As we heard, the sector makes up more than 3% of all jobs in the UK, with 2.5 million people employed in it, and we have the most unicorns in Europe. The sector here is the second-largest asset sector globally, the third-largest insurance market globally and the fifth-largest domestic banking market globally. I could go on, but the point is that the UK is absolutely a world leader in financial services, and we need to continue to be that. It is vital that we get this right. It is worth comparing London to New York. New York is the biggest financial services centre in the world and London is the second biggest, but in New York, 80% of the turnover is driven by the domestic market of America, while just 20% is international; those numbers are reversed in the UK, where 80% of the activity is international. International competitiveness is four times as important for us as it is for those in America. The Conservative party recognises that, and that is why the Leader of the Opposition has promised to deliver a new economic revolution and to create conditions that will allow the financial services sector to innovate, take risks and be an economic powerhouse. Before discussing the future of UK financial services, we need to understand the past. The City of London has been innovating and leading the way for a few hundred years now. The Knights Templar issuing receipts to crusaders for their gold created the first ever bank notes. In the 17th century, Jonathan’s Coffee House—the hon. Member for Buckingham and Bletchley will be familiar with it—was the first to advertise share prices. From there the London stock exchange grew, setting the model for equity ownership the world over. Similarly, Lloyd’s Coffee House created the insurance market that we see today. By continually innovating, the UK led the way for centuries. It is vital that the UK continues that spirit of innovation to maintain its international lead. Although we have enjoyed much success over the years, a recent report by TheCityUK and PwC shows that over the past decade growth has stalled. Technologies such as artificial intelligence and distributed ledger technology are fundamentally rewiring financial market infrastructure, and it is vital that the UK keeps up with the pace of change. Financial services firms are ready to do that, but they need policy makers to create the right conditions and then get out of the way, allowing them to innovate and take advantage of that. That brings me to what we need to do to unlock the future of UK financial services. First, we need to look at regulation in the UK. Although it is important to recognise that the UK’s regulatory and legal frameworks make us an attractive destination—that is really important; our rule of law is vital to this—we believe that the UK has gone too far and that regulation has become too burdensome. Research from TheCityUK suggested that the cost of regulatory compliance across the financial services sector now exceeds £33.9 billion. That represents more than 13% of firms’ annual average operating cost. An interesting number was presented to the Treasury Committee by Nationwide Building Society, which estimated that, as a result of over-regulation by the regulators and over-compliance by their own internal compliance department, their lending book was £35 billion smaller than it would have been, had they been complying with the original rules and regulations. That is an awful lot of money taken out of the economy, getting stuck in one building society—admittedly the biggest one, but none the less, that is an important measure that we need to consider. This money could have been better spent across the whole of the wider sector, but more worryingly, it has affected our international reputation. The chief executive officer of Marsh McLennan said that it cost six times more to comply with regulation in the UK than in any other country it operates in. That does not foster an attractive business environment. Something needs to change. That is why the Conservatives recently announced three policies that would reduce the regulatory burden. First, we would remove the ringfencing on banks. Secondly, we would reduce bank capital requirements. Thirdly, we would replace the Financial Ombudsman Service with a financial adjudication service.

• 15 Jul 2026 · National Energy System Operator: Blackout Risk · Hansard source

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  May I associate myself with the comments of my right hon. Friend the Member for New Forest East (Sir Julian Lewis) about the management of NESO creating a hostile environment for technicians in the distribution centres? Like the Minister, I have met the individuals in the control rooms, and I have nothing but admiration for them, so for them to be condemned as enemies of the company by being whistleblowers is profoundly wrong. We have heard Members raise other problems. In particular, the hon. Member for Tunbridge Wells (Mike Martin) spoke about small blackouts in his constituency, and the Minister brushed that off as a little local problem. The reality is that at the moment we use about 36 GW of power, and during the winter we use about 45GW of power, and that is before we have electrified transportation and before we have invested a huge amount in data centres and artificial intelligence. Blackouts are indicators that the grid is not working. A small blackout in Tunbridge Wells is an indicator that there could be big blackouts in the future. What is the Minister doing to resolve these problems?