Chancellor set to announce new funding package for veterans across the UK at the Spring Budget
£33 million package will increase availability of veteran housing and support veterans with serious injuries as a result of their service
Comes on top of £8.5 million package announced last year to end veteran homelessness
The Chancellor Jeremy Hunt is set to announce in this week’s Budget an additional £33 million over the next 3 years to support veterans, in recognition of the sacrifices they’ve made for the UK.
The majority of the funding package (£20 million) will go towards the Veteran Capital Housing Fund – a new project to provide extra housing for veterans through the development of new builds and refurbishment of veteran social and charitable housing.
The Chancellor will also extend the Veterans Mobility Fund – backed by £3 million – to provide enduring support for veterans with serious physical injury resulting from their service.
The remaining £10 million will go directly to the Office for Veteran’s Affairs to increase the service and engagement provided to veterans over the next two years.
Chancellor of the Exchequer Jeremy Hunt said: “We all owe our veterans a huge amount of gratitude for defending democracy and keeping our country safe – and it’s only right that we provide them with all the support they need when they come home.
“This government is firmly on the side of our veterans, and this week I’ll set out a comprehensive package of policies that will solidify our enduring commitment to our ex-servicemen and women for years to come.”
There are thousands of units in houses, village settlements, care homes and other accommodation specifically for veterans across the country. Many of these could be in need of modernisation, replacement or expansion. Providing sustainable housing is key to helping those who have left service – particularly those who are vulnerable and with complex needs.
The new £20 million Veteran Capital Housing Fund will go towards this alongside action to end veteran rough sleeping within this Parliament – helping the government deliver its pledge in the Veterans’ Strategy Action Plan 2022-24.
The Veterans Mobility Fund has previously been used to provide dedicated equipment for hundreds of eligible veterans, including specialist wheelchairs and orthotics which is not usually available via the NHS or through the Ministry of Defence. The additional £3 million will refresh this fund to ensure veterans continue to get the specialist support they need.
The government has a strong record of supporting veterans. At the end of last year, the government announced more than £8.5 million of funding to deliver services in more than 900 housing units in England, where specialist help for veterans, including with health, education and employment needs are provided.
As part of this, the government established a new referral scheme – Op FORTITUDE – that will enable veterans at risk of homelessness to access supported housing and wrap-around specialist care in health, housing and education from later this year.
The government also introduced Op COURAGE, a bespoke mental health support service for veterans in the NHS in England, backed by over £18 million a year investment plus an additional £2.7 million to be invested over the next two years. The service has already helped tens of thousands of patients since it was established in 2021.
– Chancellor declares “prepayment meter penalty over from July”, cutting energy bills for over four million families. – Families on prepayment meters will no longer pay more compared to people on direct debts. – Follows support this winter which has already cut the typical household bill by almost half.
OVER FOUR MILLION families are set to save £45 a year on their energy bills from July as the Chancellor ends the prepayment premium.
Households on prepayment meters pay more on average compared to direct debit customers due to extra costs firms take on managing meters – such as supplying vouchers and collecting payments – being passed on to users.
The vast majority of households who rely on prepayment meters are typically vulnerable or low income, which means the higher tariff and inability to spread the cost is hitting those who can least afford it.
At his Spring Budget next week, the Chancellor is expected to announce fairness reforms to energy bills, bringing the bills of families on prepayment meters in line with average direct debit energy bill under the Energy Price Guarantee.
Chancellor of the Exchequer, Jeremy Hunt said: “It is clearly unfair that those on prepayment meters pay more than others. We are going to put an end to that.
“From July four million households won’t pay more than those on direct debits. We’ve already cut energy bills by almost half this winter, and this latest reform is proof again that we’re always on the side of families.”
Energy Security Secretary Grant Shapps said: “Charging prepayment meter customers more to receive their energy is a tax on some of our most vulnerable – this change will stop that.
“It’s even more important at a time Brits are faced with high energy costs and when we’ve seen vulnerable households wrongly forced onto them. While actions I’ve pushed for have meant forced installations are on pause, warrants aren’t being waved through and Ofgem is toughening up its reviews, our changes will make sure families aren’t penalised simply for how they heat their home.”
The change is expected to come into effect from July 1 through updates to the Energy Price Guarantee at a cost of £200 million.
From April 2024, when the Energy Price Guarantee ends, the Chancellor has tasked energy regulator Ofgem to report back on additional regulatory options to permanently end the premium and bring fairness to bill payment methods in the long term.
The move is the latest government intervention to help families with their energy costs after the average family bill was cut by £1300 this Winter.
Plan expected to remove barriers to people getting into work and tackle Britain’s economic inactivity problem.
Support will focus on disabled people and those with long-term health conditions, over 50s, and low-earners and parents on Universal Credit.
Changes are expected to encourage benefit claimants to move into work or increase their hours with more Work Coach support, and childcare costs on Universal Credit to be paid up front.
Chancellor Jeremy Hunt is expected to set out the ambition to get hundreds of thousands more people into work in his Budget next week.
Benefit claimants are expected to be encouraged to move into work or increase their hours, through changes to the Universal Credit system and increased job support programmes. As a result of measures set to be announced at Budget, hundreds of thousands of claimants will be asked to attend more regular meetings with work coaches, skills bootcamps will be expanded and the Work Capability Assessment will be scrapped.
The government will also start paying childcare costs on Universal Credit up front, rather than in arrears. Currently many low-income working parents are unable to afford the up-front cost of childcare, making it harder for them to get into work. The maximum amount people can claim for childcare on Universal Credit will also be increased by several hundred pounds, making childcare more affordable for thousands of working parents.
These measures will help people get jobs, increase their hours and extend their working lives – all contributing to the government’s priority to grow the economy.
The Chancellor’s plans are expected to benefit disabled people and those with long-term health conditions, people on benefits and the over 50s. Currently there are more than a million vacancies in the economy, and one fifth of the working population is economically inactive – out of work and not looking for work.
Jeremy Hunt, Chancellor of the Exchequer, said:“Those who can work, should work because independence is always better than dependence.
“Already we’re seeing near record levels of employment in Britain, but we need to go further to build a country that rewards work and gives everyone the chance of a better future.
“But for many people, there are barriers preventing them from moving into work – lack of skills, a disability or health condition, or having been out of the jobs market for an extended period of time. I want this back-to-work Budget to break down these barriers and help people find jobs that are right for them.
“We need to plug the skills gaps and give people the qualifications, support and incentives they need to get into work. Through this plan, we can address labour shortages, bring down inflation, and put Britain back on a path to growth.”
Changes to the Universal Credit system are anticipated to encourage claimants to move into work or increase their hours with additional support from their Work Coaches.
Changes to Universal Credit will include:
Paying parents on Universal Credit childcare support up-front when they are moving into work or increasing their hours, rather than in arrears meaning low-income families will find it easier to afford and it will help remove a barrier that many face when thinking about going back to work.
Increasing the maximum amount parents on Universal Credit can receive in childcare support by several hundred pounds, making childcare more affordable for thousands of parents.
Alongside these changes, strengthened work search requirements are expected to encourage over 700,000 lead carers of children on Universal Credit to look for work or increase their hours and will receive additional Work Coach support to do so. Previously they would have had only limited requirements, or no requirements at all.
The Administrative Earnings Threshold (AET), the minimum amount a person can earn without being asked to meet regularly with their Work Coach, will be increased from the equivalent of 15 to 18 hours of earnings at the National Living Wage for an individual claimant. The couples AET, where a second member of a household may not be asked to look for work if their partner is working, will be removed entirely. This is expected to ask over 100,000 additional claimants to meet more regularly with a Work Coach and take active steps to move into work or increase their earnings.
Strengthening the application of the Universal Credit sanctions regime. This includes additional training for Jobcentre Work Coaches to ensure they are applying sanctions effectively, including for claimants who do not look for or take up employment, and automating administrative elements of the sanctions process, including sending automated messages to claimants who fail to meet with their Work Coach, to reduce error rates and free up Work Coach time.
For disabled people and long-term sick:
A Health and Disability White Paper will be published on the day of the Budget outlining our plans to scrap the Work Capability Assessment. Under the current system disabled people need to have a health assessment and be found incapable of work to receive additional income support through the benefits system. Scrapping the Work Capability Assessment is the biggest reform to the welfare system in a decade, meaning that disabled people can try work without fear of losing their benefits, and reducing the number of assessments needed to qualify for health-related benefits.
For the over 50s:
Returnerships will offer skills training that focuses on flexibility and takes previous experience into account, shortening the length of time they have to be in training.
Skills bootcamps will be expanded by 8,000 places per year in 2024-25, up from 56,000 currently, reskilling people in important sectors such as construction and technology.
Latest figures show that employment is at 75.6% and unemployment is close to a record low of 3.7%.
Charities and business groups react to the Chancellor’s expected Budget announcement of getting hundreds of thousands more people into work.
Plan expected to remove barriers to people getting into work and tackle Britain’s economic inactivity problem.
Support will focus on disabled people and those with long-term health conditions, over 50s, and low-earners and parents on Universal Credit.
Changes are expected to encourage benefit claimants to move into work or increase their hours with more Work Coach support, and childcare costs on Universal Credit to be paid up front.
STAKEHOLDER REACTION: CHARITIES
Victoria Benson, Chief Executive, Gingerbread said:“Single parents are all too often locked out of work because they can’t afford the upfront childcare costs.
“We welcome this change and the increase in childcare support available to low income single parents. We know that single parents want to work and that those who are working want to work more hours and these changes will help many to do just this.”
Dan Paskins, Director of UK Impact, Save the Children said:“The UK Government has made the right decision in deciding to pay childcare fees for those on Universal Credit upfront rather than in arrears. This system was stopping people getting into work and putting people into debt.
“We’re delighted also for Save the Children’s parent campaigners who have spent years trying to get this system changed and given evidence many times in person about how this system has been negatively impacting their lives.
“This is good for families, good for our economy and most of all, good news for children. It is a simple and effective change which will help put money in families’ pockets and make life easier for parents juggling work and childcare.”
Laura Davis, Chief Executive, The British Association for Supported Employment said:“The British Association for Supported Employment (BASE) welcomes the Government’s announcements, which focus on empowering more disabled people to feel confident in entering or re-entering the labour market.
“We’re particularly pleased to hear about the plans to scrap the work capability assessment which will be a great step towards ensuring people can try employment without fear.
“We believe everyone who wants to work, can, with the right job and the right support, and should be provided every opportunity to dream big, without fear of being financially worse off.
“We look forward to hearing the detail in the Back to Work Budget on the 15th March and would welcome the opportunity to work with the government over the upcoming months to ensure that the right support into employment is available to all disabled people across the country.
“BASE is proud to represent the amazing Supported Employment Services and Employer-Partners, who are committed to embedding inclusive recruitment, using the evidenced-based model that works. Our place, train and maintain model supports Disabled, Neurodivergent and disadvantaged people across the UK, into well matched sustainable careers that meets their needs and those of the labour market.”
STAKEHOLDER REACTION: BUSINESS REPRESENTATIVE ORGANISATIONS & TRADE BODIES
Syma Cullasy-Aldridge, Chief Campaigns Director, CBI said:“As firms struggle to fill more than one million job vacancies in the economy, it’s good to see the Government finding ways to support people back into the workplace.
“Childcare costs are a barrier to many parents returning to work, especially those on lower incomes. It’s absolutely right that Government childcare support for those on Universal Credit is now paid upfront. The Government needs to announce the launch of a review into childcare to ensure it works for everyone.
“Helping the over 50s return to work requires flexible skills support from firms, so the Government should be listening to business-wide calls for a reform of the Apprenticeship Levy.
“Business will hope to hear more on how the Government can help support people back into the workplace at next week’s Budget – big gaps in our workforce require big solutions.”
Kate Nicholls, Chief Executive, UKHospitality said:“Despite having record numbers of people working in hospitality, labour shortages continue to hold back our sectors growth potential.
“The 150,000 vacancies in hospitality are forcing venues to reduce trading hours and days, significantly impacting businesses to the tune of £25 billion in lost sales and £7 billion in lost tax to the Treasury, which hamstrings our very real capability to deliver record sales when firing on all cylinders.
“The measures announced by the Government are positive and will help get more people into work. In particular, the introduction of more flexible, shortened skills training and breaking down some of the barriers to work that exists within Universal Credit will be beneficial.
“With hospitality so central to the everyday economy and a proven driver of economic growth, investment and jobs, it’s absolutely right that addressing these shortages are a priority for the Chancellor. Making this work for such a strategically important sector will allow hospitality to help the Government deliver its twin objectives of getting the economy growing and bringing down inflation.
“Through our work with Ministers on the over 50s working group and as a Disability Ambassador for the Cabinet Office, I look forward to continuing to work with the Government on labour, skills and training.”
Neil Carberry, Chief Executive, the Recruitment & Employment Confederation, said:“Our analysis shows that labour & skills shortages could cost the UK economy up to £39billion per year from 2024 – around the same as two Elizabeth lines.
“So it is important that action is taken, particularly in childcare which can be a significant barrier to work for many families. Helping those furthest away from the labour market into work is vital – and has been our focus through the Restart programme. Schemes like Restart prove the job is not one for government alone, businesses and recruitment experts can also play their part to great effect.”
Elizabeth Taylor, Chief Executive, Employment Related Services Association (ERSA) said:“At the Employment Related Services Association, we welcome the announcement that barriers to employment will be removed for some economically inactive groups.
“The employment support sector has the experience and knowledge to deliver this, and we know what works, so we sincerely hope that we will have a part to play. We know the differences between those who are voluntarily and involuntarily not currently seeking work, we recognise that employment support needs to be tailored to the individual, these are not homogenous groups.
“Providers in the sector will be required to work with those who will not engage with Jobcentre Plus. The employment support sector has a proven track record of community-based engagement, of delivering advice and support, and expertise in matching people with the right job that can be sustained. Returning to work must be an attractive proposition – let’s make it one.”
People who refuse to stop promoting tax avoidance in the UK could serve time in prison. the Chancellor is expected to announce at next week’s Spring Budget.
Fewer non-compliant tax avoidance schemes operating in the market cuts the likelihood of people getting involved with them and facing thousands of pounds in unexpected future tax bills and penalties as a result
Part of Chancellor’s commitment to help protect taxpayers and public services.
People who refuse to stop promoting tax avoidance in the UK could serve time in prison, the Chancellor is expected to announce at next week’s Spring Budget.
The UK loses around £400 million per year to marketed tax avoidance, money which could be going towards public services, and it is the users of schemes, including agency workers, contractors and freelancers, who can end up with big tax bills, rather than the promoters who sold it to them.
Wednesday’s expected announcement is part of the Chancellor’s commitment to continue cracking down on those selling tax avoidance schemes to help protect taxpayers and public services.
Chancellor of the Exchequer Jeremy Hunt said: “It is everyday people who lose out from tax avoidance, whether it’s individuals facing big bills after getting involved with harmful schemes or funding being taken away from public services.
“That is why I am determined for promoters to face the music for the damage they cause and the lives they harm by stopping them in their tracks.”
Marketed tax avoidance schemes tempt people into avoidance landing them with unexpected tax bills. Promoters of schemes are behind the schemes, and they often use a network of sellers to help them. Over the last 18 years, they have shifted focus away from wealthy clients towards people on middle incomes. Today the market is dominated by umbrella companies that choose to target contractors and agency workers.
To help everyday taxpayers, HMRC are laser-focused on driving promoters out of business. 31 tax avoidance schemes and 27 of their promoters had been named by HMRC to warn thousands of taxpayers to not to get involved.
There are also already financial penalties in place for promoters who ignore “Stop Notices” and don’t stop promoting.
But the Chancellor is expected to go one step further at the Budget by announcing a consultation that could result with promoters serving time in UK prisons when found guilty in a court of law.
While individuals are ultimately accountable for their own tax affairs, this action will also help up to 2.4 million contractors, including hospital workers, who can become involved in tax avoidance through the agencies they trust to handle their tax affairs. According to HMRC, hospital workers, including those working part-time, are the highest users of tax avoidance schemes in the UK out of any sector.
Fewer non-compliant tax avoidance schemes operating in the market cuts the likelihood of people getting involved with them in the first place, and facing thousands of pounds in unexpected future tax bills and penalties as a result.
Case Study – Tanya, nurse
Tanya got caught up in a tax avoidance scheme and has shared her story as a warning to others.
Tanya is a single parent. She works as a critical care nurse at her local hospital. She found her job through an agency, and they recommended an umbrella company that provided payroll services. Tanya chose an umbrella company that gave her the highest take-home pay. This turned out to be a tax avoidance scheme which she joined. This left her with an unexpected tax bill, on top of the high fees she had paid to the umbrella company for using the scheme.
“I was sold on the benefits of higher pay.”
Tanya explains: “As a nurse I trust my patients and they trust me, that is the relationship of care. I trusted my agency and umbrella company and I feel like they lied to me and scammed me, I thought my umbrella company would care but they didn’t.
“My agency and umbrella company sold me the benefits of higher pay through what they described as their Tax Plan model. This has now left me owing HMRC money and my umbrella company has washed their hands of me, they just disappeared and left me with the tax bills.”
It is unlikely that Tanya will be able to recover the high fees charged by her umbrella company, as they are now seeking voluntary liquidation. She must also pay tax of nearly £7,500 and some interest.
Tanya contacted HMRC and wanted to sort everything out. If she can’t settle her taxes and pay what she owes in one go, she will be offered time to pay her tax bill by instalments.
As well as criminalising promoters of such schemes, the Chancellor is also expected to announce that their directors could be quickly disqualified from directing companies. This builds on the government’s existing work to deter promoters from promoting schemes.
UK Chancellor Jeremy Hunt met with finance ministers and central bank governors from world’s major economies at G20 in Bengaluru, India
Chancellor also met with Indian technology business leaders on first overseas trip to deepen UK/India economic ties
Chancellor set out the UK’s growth agenda ahead of Spring Budget next month
Jeremy Hunt has concluded his first international visit as Chancellor to Bengaluru, India, for the first G20 Finance Ministers and Central Bank Governors meeting held under India’s 2023 Presidency.
The Chancellor, alongside Andrew Bailey, the Governor of the Bank of England, attended a meeting of G7 Finance Ministers and Central Bank Governors on Thursday 23 February.
They were joined virtually by Ukrainian Finance Minister Serhiy Marchenko. Their statement sent a strong message of condemnation for Russia’s war of aggression against Ukraine, announced an increase of financial support for the Ukrainian government to a total of US$39 billion in 2023 and committed to continue supporting vulnerable countries hardest hit by the economic impact of the war.
On Friday, the UK announced a fresh wave of internationally co-ordinated sanctions and trade measures, to further restrict Russia’s capability to wage war in Ukraine both now and in the future.
The Chancellor also attended the first G20 Finance Ministers and Central Bank Governors meeting under the Indian Presidency. He condemned Russia’s brutal acts in the strongest terms, emphasising– like many other Ministers present – that securing peace was the most important action for global growth.
He also underscored the need for bilateral official creditors and private sector to urgently help address low and middle-income country debt vulnerabilities in developing countries; the importance of multilateral development banks boosting lending from their existing balance sheets; and called on the G20 to fulfil its pledge to channel $100 billion of IMF Special Drawing Rights in support of developing countries.
The Indian Presidency issued a Chair’s statement at the end of the meeting. It highlighted, among other things, the continued need to fight inflation, and the importance of supply-side policies, especially those that increase labour supply, boost growth and alleviate price pressures.
There was also G20 consensus, including China, on the need for swift resolution of existing debt restructuring cases and to work on the impacts of food and energy insecurity on the global economy.
While in Bengaluru, the Chancellor had productive bilateral meetings with U.S. Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell, French Minister of Economy and Finance Bruno Le Maire and Kristalina Georgieva, Managing Director of the International Monetary Fund. He also met with Australian Treasurer Jim Chalmers.
At a meeting with Indian Finance Minister Nirmala Sitharaman, both sides agreed to make further progress on the UK-India Free Trade Agreement and deepen bilateral economic and financial ties. They agreed to make swift progress on setting up the next UK-India Economic and Financial Dialogue.
The Chancellor took the opportunity whilst in Bengaluru to meet with business leaders, home to India’s fast-growing tech hub. He visited the offices of Indian consultancy and tech multinational Wipro, which employs over 4,000 people in the UK.
Chancellor of the Exchequer Jeremy Hunt said: “Meeting fellow Finance Ministers face to face is an excellent opportunity to make real progress on the key global economic issues of our time.
“I first visited India 38 years ago, and it’s been fascinating to see how much the country has changed in this time – there are positive lessons to be learnt from their successful rapid development.
“It’s been great to hear from Indian technology business leaders here in Bengaluru how they are pushing the country’s economy forward, and I look forward to further collaboration between India and the UK as we continue to trade and create jobs – delivering on the government’s plan to grow the economy”
While speaking at the meetings, the Chancellor set out the UK government’s intention to protect the most vulnerable from cost-of-living pressures, whilst maintaining fiscal sustainability with debt falling and not adding to inflationary pressure.
He added that the upcoming Spring Budget on 15 March will drive economic growth , focusing on skills, business and infrastructure investment and research and innovation, as well as reviewing regulations of the UK’s key growth industries.
Chancellor arrives in India for G20 meetings one year after Putin’s illegal invasion of Ukraine
He will attend meeting of G20 Finance Ministers and Central Bank Governors alongside Bank of England Governor Andrew Bailey, showing shared focus on tackling global economic issues.
He will also attend a meeting of the G7 on Thursday
The Chancellor will meet with the Indian Finance Minister and a range of senior Indian business leaders to strengthen ties and help the UK on its way to becoming the next Silicon Valley
The Chancellor Jeremy Hunt is today in Bengaluru, India to attend the G20 Finance Ministers and Central Bank Governors Meeting in his first visit overseas since taking office.
The meeting comes one year after Russia’s full-scale invasion of Ukraine – where the Chancellor will reaffirm the UK’s unwavering support for Ukraine and discuss with other G20 members ways to address issues such as elevated global inflationary pressures and the instability in energy and food prices that are being exacerbated by the war.
It follows the latest move on behalf of the G7, the European Union and Australia, who via a Price Cap Coalition, set caps on the price of seaborne Russian oil products effective from 5 February 2023. High-value Russian exports such as diesel and gasoline are capped at $100 while lower-value products such as fuel oil are capped at $45. The UK phased out the import of Russian oil and oil products last year.
The Chancellor is attending the G20 alongside the Governor of the Bank of England Andrew Bailey. Both are focused on tackling inflationary pressures in the UK. Inflation is the first of 5 Prime Minister priorities, with the Prime Minister looking to see inflation halve this year on its way back to the target.
The Chancellor and Bank of England Governor will also join a meeting of G7 Finance Ministers on Thursday.
Chancellor of the Exchequer Jeremy Hunt said: “The UK continues to stand firm in our support for Ukraine with significant military and humanitarian assistance. The sooner there is sustainable peace in Ukraine and an end to this horrific war, the sooner we can address the global economic fallout – diminishing Putin’s leverage over the UK and our friends.”
The trip also aims to strengthen the already productive UK/India economic relationship and deepen ties to increase new investment and bringing new jobs to the UK. With its rich reputation for a cutting-edge tech industry, the Chancellor will be meeting Indian tech CEOs and founders in Bengaluru to explore investment opportunities and how links with India can help the UK become the world’s next Silicon Valley, building on our existing $1 trillion (£827 billion) tech industry.
The Chancellor added: “I want the UK to be the world’s next Silicon Valley – this is an ambition within reach thanks to our status as a global financial powerhouse and home to world class universities and research institutions.
“We already have a $1 trillion tech industry, but we want to go further to create jobs and wealth across the UK. To help us get there, we need to deepen investment connections with like-minded countries around the world – starting with our Indian friends who are fast becoming an economic superpower in their own right.”
India is projected to be the world’s third largest economy by 2050, with a tech industry that generated US$227 billion (£188 billion) in revenue in FY2022. It is already a significant economic partner for the UK, and the Chancellor is seeking to promote greater collaboration between the two countries.
The Chancellor’s work at the G20 will also contribute to the government’s priorities to halve inflation this year to ease the cost of living and give people financial security; grow the economy, create better-paid jobs and opportunity right across the country; and make sure our national debt is falling so that we can secure the future our of public services.
Thank you for that welcome, thank you all for joining us at Bloomberg.
From the way we communicate and collaborate, to the way we buy and sell goods and services, digital technology has transformed nearly every aspect of our economic lives.
How do I know that?
Because I too, just like Matt asked ChatGPT to craft the opening lines of this speech.
Who needs politicians when you have AI?
Like other countries, the UK has been dealing with economic headwinds caused by a decade of black swan events: a financial crisis, a pandemic and then an international energy crisis.
And my party understands better than others the importance of low taxes in creating incentives and fostering the animal spirits that spur economic growth.
But another Conservative insight is that risk taking by individuals and businesses can only happen when governments provide economic and financial stability.
So the best tax cut right now is a cut in inflation.
And the plan I set out in the Autumn Statement tackles that root cause of instability in the British economy.
The Prime Minister talked about halving inflation as one of his five key priorities and doing so is the only sustainable way to restore industrial harmony.
But today I want to talk about his second priority, to grow the economy. (In case you weren’t sure, I have them on the screen behind me.)
We want to be one of the most prosperous countries in Europe and today I’m going to outline the 4 pillars of our plan to get there.
Just as our plan to halve inflation requires patience and discipline, so too will our plan for prosperity and growth.
But it’s also going to need something else which is in rather short supply – Optimism, but we can get there.
Just this month columnists from both left and the right have talked about an “existential crisis,” “Britain teetering on the edge” and that “all we can hope for…is that things don’t get worse.”
I welcome the debate – but Chancellors, too, are allowed their say.
And I say simply this: declinism about Britain is just wrong.
It has always been wrong in the past – and it is wrong today.
Some of the gloom is based on statistics that do not reflect the whole picture.
Like every G7 country, our growth was slower in the years after the financial crisis than before it.
But since 2010, the UK has grown faster than France, Japan and Italy. Not at the bottom, but right in the middle of the pack.
Since the Brexit referendum, we have grown at about the same rate as Germany.
Yes we have not yet returned to pre-pandemic employment or output levels.,
But an economy that contracted 20% in a pandemic still has nearly the lowest unemployment for half a century.
And while our public sector continues to recover more slowly than we would like from the pandemic – strengthening the case for reform – our private sector has grown 7.5% in the last year.
Yes inflation has risen – but is still lower than in 14 EU countries, with interest rates rising more slowly than in the US or Canada.
And yes we have to improve our productivity. But output per hour worked is higher than pre-pandemic.
And last week a survey of business leaders by PWC said the UK was the third-most attractive country for CEOs expanding their businesses.
Economists and journalists know you can spend a long time arguing the toss on statistics,
But the strongest grounds for optimism comes not from debating this or that way of analysing data points but from our long term prospects: because when it comes to the innovation industries that will shape and define this century the UK is powerfully positioned to play a leading role.
Let’s just look at some of them.
In digital technology, as we heard from Michelle, we have become only the third economy in the world with a trillion-dollar sector.
We have created more unicorns than France and Germany combined with eight UK cities now home to two or more unicorns.
The London / Oxford / Cambridge triangle has the largest number of tech businesses in the world outside San Francisco and New York.
PWC say that UK GDP will be up to 10% higher in 2030 because of AI alone. Fintech attracted more funding last year than anywhere in the world outside the US.
Or life sciences, where we have the largest sector in Europe. And a brilliant advocate with our superb Science Minister George Freeman.
We produced one of the world’s first Covid vaccines, estimated to have saved more than 6 million lives worldwide.
We identified the treatment most widely used to save lives in hospitals, saving more than a million lives across the globe.
We are behind only the US and China in terms of high-quality life science papers published, and every one of the world’s top 25 biopharmaceutical firms has operations in the UK.
Another big growth area is our green and clean energy sector.
The UK is a world leader here, with the largest offshore wind farm in the world. Last year we were able to generate an incredible 40% of our electricity from renewables. But on one day, a rather windy December 30th, we actually got 60% of our electricity from renewables – mainly wind.
McKinsey estimate that the global market opportunity for UK green industries could be worth more than £1 trillion between now and 2030.
And we are proceeding with the new plant at Sizewell C, led by our excellent Business Secretary who also spoke very wisely and surprisingly classically earlier on.
I could also talk about our creative industries which employ over two million people and grew at twice the rate of the UK economy in the last decade.
They have made the UK the world’s largest exporter of unscripted TV formats and help give us a top three spot in the Portland Soft Power index.
Or our advanced manufacturing sector, key to exports, where we produce around half of the world’s large civil aircraft wings and its biggest aeroengines as well as around half of the world’s Formula One Grand Prix cars.
The golden thread running through the industries where the Britain does best is innovation.
Amongst the world’s largest economies, the Global Innovation Index ranks us fourth globally.
Those innovation industries now account for around a quarter of our output. They have been responsible for nearly all our productivity growth since 1997.
And they’re also the reason that all of you are here.
In the audience we have leaders from Meta, Microsoft, Amazon, Apple and Google, the world’s largest tech companies all with major operations in the UK.
We have Monzo and Revolut, shining examples from our world-beating fintech sector.
And we have founders and CEOs from some of our most exciting UK technology companies, like Proximie and Matillion.
You are all vital for Britain’s economic future, but Britain is vital for your future too.
So I want to ask all of you to help our country achieve something that is both ambitious and strategic.
I want you to ask you to help turn the UK into the world’s next Silicon Valley.
What do I mean by that?
If anyone is thinking of starting or investing in an innovation or technology-centred business, I want them to do it here [in the UK].
I want the world’s tech entrepreneurs, life science innovators, and green tech companies to come to the UK because it offers the best possible place to make their visions happen.
And if you do, we will put at your service not just British ingenuity – but British universities to fuel your innovation, Britain’s financial sector to fund it and a British government that will back you to the hilt.
Our universities are ranked second globally for their quality and include three of the world’s top ten.
In order to support the ground-breaking work they do in so many new fields the government has protected our £20 billion research budget, now at the highest level in history.
And as you look for funding to expand, we offer one of the world’s top two financial hubs and the world’s largest net exporter of financial services.
The capability of the City of London combined with the research strengths of our universities makes our aspiration to be a technology superpower not just ambitious but achievable – and today I am here to say the government is determined to make it happen.
But like any business embracing new opportunities, we should also be straight about our weaknesses.
Structural issues like poor productivity, skills gaps, low business investment and the over-concentration of wealth in the South-East have led to uneven and lower growth. Real incomes have not risen by as much as they could as a result.
Confidence in the future though, starts with honesty about the present.
We want to be one of the most prosperous countries in Europe, so today I set out our plan to address those issues.
That plan, our plan for growth, is necessitated, energised and made possible by Brexit.
The desire to move to a high wage, high skill economy is one shared on all sides of that debate.
And we need to make Brexit a catalyst for the bold choices that we’ll take advantage of the nimbleness and flexibilities that it makes possible.
This is a plan for growth and not a series of measures or announcements, which will have to wait for budgets and autumn statements in the years ahead.
But this plan is a framework against which individual policies will be assessed and taken forward.
I set out that plan, those priorities under four pillars. They build on the “People, Capital, Ideas” themes set out by the Prime Minister last year in his Mais Lecture and as such are the pillars essential for any modern, innovation-led economy.
For ease of memory the 4 pillars all happen to start with the letter ‘E’ . The Four ‘E’s of economic growth and prosperity. And they are Enterprise, Education, Employment and Everywhere.
So let’s start with the first ‘E’ which is enterprise. If we are to be Europe’s most prosperous economy, we need to have quite simply, its most dynamic and productive companies.
There is a wide range of literature citing the importance of entrepreneurship on business dynamism, whereby more productive firms enter and grow and less productive firms shrink.
But I don’t just believe the theory, I have put it into practice.
I set up and ran my own business for 14 years. It was one of the best decisions I ever made – and I actually owe it to Margaret Thatcher and Nigel Lawson.
Because by the time I got to university and was thinking about my career options, they had changed attitudes towards entrepreneurship. Had they not, I would have probably ended up in the City or the Civil Service.
Instead I took a different route to end up at the Treasury – less the Fast Stream, more the Long Way Round.
Like thousands of others setting up on their own, I learned to take calculated risks, live with uncertainty and work through failures (of which there were many).
Every big business was a start-up once – and we will not build the world’s next Silicon Valley unless we nurture battalions of dynamic new challenger businesses.
Today, we are already ranked by the World Bank as the best place to do business amongst large European nations and second only to America in the G7.
And the result of that pro-business climate is that since 2010 we have created more than a million new businesses in this country.
But the question I want to ask is how are we going to generate the next million?
Firstly, we need lower taxes. In Britain, even after recent tax rises, we have one of the lowest levels of business tax as a proportion of GDP amongst major countries.
But we should be explicit: high taxes directly affect the incentives which determine decisions by entrepreneurs, investors or larger companies about whether to pursue their ambitions in Britain.
With volatile markets and high inflation, sound money must come first.
But our ambition should be to have nothing less than the most competitive tax regime of any major country.
That means restraint on spending – and in case anyone is in any doubt about who will actually deliver that restraint to make a lower tax economy possible, I gently point out that in the three weeks since Labour promised no big government chequebook they have made £45 billion of unfunded spending commitments.
But it isn’t just about lower taxes. We also need a more positive attitude to risk taking.
Let’s start with one of the most public risks taken this year. Richard Branson, his team and the UK Space Agency deserve massive credit for getting LauncherOne off the ground in Cornwall.
The mission may not have succeeded this time, but what we learn from it will make future success more likely.
We should heed the words of Thomas Edison who said: “I have not failed 10,000 times – I’ve successfully found 10,000 ways that will not work.”
Edison was American – and our attitude to risk in this country can still be too cautious compared to our US friends.
But we are capable of smart risking in this country: at the start of the pandemic we bought over 350 million doses of vaccine without knowing if they would actually work – and ended up with one of the fastest and most effective vaccine programmes in the world.
We also need, if we are going to deliver those competitive enterprises, smarter regulation.
Brexit is an opportunity not just to change regulations but also to work with our experienced, effective and independent regulators to create an economic environment which is more innovation friendly and more growth focused.
Our Chief Scientific Adviser, Sir Patrick Vallance, is currently reviewing how the UK can better regulate emerging technologies in high growth sectors and the government is identifying where to reform the laws we inherited from the EU.
In the digital space Patrick is working with the brilliant , Matt Clifford – who we heard from earlier- and our amazing Culture Secretary Michelle Donelan, both of whom gave excellent speeches.
Before we conclude those findings, we want to hear from you. That why we’ve invited you this morning – and we will repeat the process for green industries, life sciences, creative industries and advanced manufacturing.
Finally when it comes to the ‘E’ of Enterprise there is a critical need for easier access to capital, particularly scale ups.
I am supporting important changes to the pensions regulatory charge cap and I have used the regulatory flexibility provided by Brexit to change the Solvency II regulations which will begin to be implemented in the coming months.
Alongside other measures announced in the Edinburgh reforms, this could unlock over one hundred billion pounds of additional investment into the UK’s most productive growth industries.
But there is much more to be done and I want to harness the ideas and the expertise in this room to turn the ‘E’ of enterprise into an enterprise culture built on low taxes, reward for risk, access to capital and smarter regulation.
The next ‘E’ is Education.
This is an area where we have made dramatic progress in recent years thanks to the work of successive Conservative education ministers.
The UK has risen nearly 10 places in the global school league tables for maths and reading since 2015 alone.
Our teachers and lecturers are some of the best in the world.
And as the Prime Minister has said, having a good education system is the best economic, moral, and social policy any country can have.
That is why the Autumn Statement we gave schools an extra £2.3 billion of funding and why the Prime Minister recently prioritised the teaching of maths until 18.
But there is much to improve. We don’t do nearly as well for the 50% of school leavers who do not go to university as we do for those who do.
We have around 9 million adults with low basic literacy or numeracy skills, over 100,000 people leaving school every year unable to reach the required standard in English and maths.
That matters.
We are becoming an adaptive economy in which people are likely to have to train for not one but several jobs in their working lives.
Not having basic skills in reading and maths makes that difficult, sometimes impossible.
And equally important is what happens beyond school.
We have made progress with T-levels, boot camps and apprenticeships and Sir Michael Barber is advising the government on further improvements to the implementation of our reform agenda and we want to ensure our young people have the skills they would get in Switzerland or Singapore.
If we want to reduce dependence on migration and become a high skill economy, the ‘E’ of education will be essential – and that means ensuring opportunity is as open to those who do not go to university as to those who do.
So, Silicon Valley enterprises; Finnish and Singaporean education and skills; let me now turn to the third ‘E’ which is Employment.
If companies cannot employ the staff they need, they cannot grow.
High employment levels have long been a strength of our economic model.
Since 2010, the UK has seen a record employment rate, the lowest unemployment rate in nearly fifty years and labour market participation at an all-time high.
Partly thanks to the coalition reforms of a decade ago we are at 76% ,employment levels higher than Canada, the US, France or Italy.
But the pandemic has exposed weaknesses in our model. Total employment is nearly 300,000 people lower than pre-pandemic with around one fifth of working-age adults economically inactive.
Excluding students that amounts to 6.6 million people – an enormous and shocking waste of talent and potential.
Of that 6.6 million people, around 1.4 million people want to work. But a further five million do not.
It is time for a fundamental programme of reforms to support people with long-term conditions or mental illness to overcome the barriers and prejudices that prevent them working.
We will never harness the full potential of our country unless we unlock it for each and every one of our citizens.
Nor will we fix our productivity puzzle unless everyone who can participate does.
So to those who retired early after the pandemic or haven’t found the right role after furlough, I say: ‘Britain needs you’ and we will look at the conditions necessary to make work worth your while.
That is why employment is such a vital third ‘E.’
Enterprise, Education and Employment – three key components for long term prosperity.
I conclude with my final ‘E’ – Everywhere. That means ensuring the benefits of economic development are felt not just in London and the South-East but across the whole of the UK.
It is socially divisive if young people feel the only way to make a decent living is to head south. But it is also economically damaging.
If our second cities were the productive powerhouses we see in the other major countries, our GDP would be nearly 5% higher – making us second only to the United States and Germany for GDP per head.
That is why levelling up matters. And why last week it was so exciting to see the progress being made.
Since February 2020, when the levelling up agenda really got underway ,70% of new employed jobs have been created outside of London and the South-East.
Thanks to our powerhouse regions we remain one of the top 10 manufacturers globally, and the same is starting to happen with new industries: whether fintech in Bristol, gaming in Dundee or clean energy in Teesside.
Every region has seen pay grow faster than London since 2010, which shows that our approach to regional growth is working.
But there is much more to do, and whilst government grants can play a galvanising role they are not the whole answer.
We also need the connectivity that comes from better infrastructure.
That is why in the Autumn Statement we protected key projects like HS2, East West Rail and core Northern Powerhouse Rail.
Digital connectivity matters as well. Under Michelle’s leadership, full-fibre broadband now available to more than 40% of all homes in the UK.
Last year four million more premises got access, with the biggest increases in Scotland and Northern Ireland.
But the ‘E’ of Everywhere has to be about local wealth creation as much as about local infrastructure.
So this year we will announce investment zones, mini-Canary Wharfs, supporting each one of our growth industries, and each one focused in high potential but underperforming areas, in line with our mission to level up.
They will be focused on our research strengths and executed in partnership with local government, with advantageous fiscal treatment to attract new investment.
We will shortly start a process to identify exactly where they will go.
But spreading opportunity everywhere needs local decision making alongside local infrastructure and local enterprise.
So we must also give civic entrepreneurs the ability to find and fund their own solutions without having to bang down a Whitehall door.
Shortly over 50% of the population of England will be covered by a devolution deal and two thirds covered by a unitary authority and that’s a very important part of that.
But we need to move more decisively towards fiscal devolution so that fantastic local leaders like Ben Houchen and Andy Street have the tools they need to deliver for their communities.
Four ‘E’s – Enterprise, Education, Employment and Everywhere – four ‘E’s to unlock our national potential to be one of Europe’s most exciting, most innovative and most prosperous economies.
Bill Gates is supposed to have said people overestimate what they can do in one year and underestimate what they can do in ten.
When it comes to the British economy, we are certainly not going to fall into that trap.
We will remember the essential foundation on which long term prosperity depends, namely the sounds money that comes from bringing down inflation. But right now, starts our longer-term journey into growth and prosperity.
World-beating enterprises to make Britain the world’s next Silicon Valley.
An education system where world-class skills sit alongside world-class degrees.
Employment opportunities that tap into the potential of every single person so businesses can build the motivated teams they need.
And as talent is spread everywhere, so we will make sure opportunities are as well.
Yes there are many structural challenges to address. And working our four pillars we will do just that. Never forgetting though the combination of bold ingenuity and quiet confidence that defines our national character.
Ladies and gentlemen, being a technology entrepreneur changed my life.
Being a technology superpower can change our country’s destiny.
Chancellor Jeremy Hunt will set out a long-term plan for prosperity made possible by Brexit.
Hunt will make the case against “declinism”, with the UK growing faster than France, Japan and Italy since 2010.
He will also confirm post-Brexit reforms to unlock £100bn of private investment this decade will be implemented in the coming months.
Chancellor of the Exchequer Jeremy Hunt will today set out his approach to tackle poor productivity and boost growth, using the new freedoms won by Brexit as a catalyst.
Following the Prime Minister New Year address outlining his five priorities which include growing the economy, halving inflation and getting debt down – the Chancellor will speak about how this will be accomplished.
Delivering the speech at Bloomberg’s European headquarters in London, Mr Hunt will caution against an attitude of “declinism” about Britain and set out the case for optimism as the UK aims to play a leading role in Europe and across the world in the industries of tomorrow. Since 2010 the UK economy has grown faster than France, Italy and Japan, and since the EU referendum the UK economy has grown at around the same rate as Germany.
The Chancellor will also confirm that post-Brexit reforms to Solvency II will be implemented in the coming months, which could unlock £100 billion of additional investment into the UK’s most productive assets this decade – such as clean energy and UK infrastructure.
Chancellor Jeremy Hunt is expected to say: “Our plan for the years that follow is long term prosperity based on British genius and British hard work.
“[And] world-beating enterprises to make Britain the world’s next Silicon Valley.”
The Chancellor will also caution against declinism, with the UK aiming to play a leading global role:
“Declinism about Britain was wrong in the past – and it is wrong today.
“Some of the gloom is based on statistics that do not reflect the whole picture.
“Like every G7 country, our growth was slower in the years after the financial crisis than the years before it. But since 2010, the UK has grown faster than France, Japan and Italy. Since the Brexit referendum, we have grown at about the same rate as Germany.
“If we look further ahead, the case for declinism becomes weaker still. The UK is poised to play a leading role in Europe and across the world in the growth sectors which will define this century.”
The Chancellor will focus on key growth industries, including Digital Technology, Green Industries, Life Sciences, Advanced Manufacturing and Creative Industries – areas where Britain has a competitive advantage to build on further.
Mr Hunt will also set out some of the challenges the UK faces, including poor productivity, and set out a plan to long-term prosperity, using the UK’s new-found Brexit freedoms to support growth and entrepreneurship.
In the Autumn Statement, the Chancellor set out the government’s strategy for boosting growth by investing in our people, in the infrastructure that connects our country, by creating the right environment for business investment, and by supporting our world-leading financial services companies and innovators.
To further support investment across our economy, the Chancellor also announced a decision to proceed with reforms to Solvency II – an EU Directive that governs the amount of funds British insurers are required to hold in reserve. The Association of British Insurers suggest the Chancellor’s reforms are expected to unlock up to £100 billion of private investment this decade into UK infrastructure and clean energy, such as nuclear power.
And in December, the Chancellor went further and announced the Edinburgh Reforms – a package of reforms to drive growth and competitiveness in the UK’s financial services sector, while retaining our commitment to high international standards. This included the publication of our ambitious plan for repealing and reforming EU law for financial services.
The Chancellor is also expected to say: “Confidence in the future starts with honesty about the present, and we should not shy away from the biggest challenge we face which is our poor productivity. Our plan for long term prosperity tackles that challenge head on.
“It is a plan necessitated, energised and made possible by Brexit which will succeed if it becomes a catalyst for the bold choices we need to take.
“Our plan for growth is a plan built on the freedoms which Brexit provides. It is a plan to raise productivity. It is a plan to use the proceeds of growth to support our public services at home, to support businesses in the new low carbon economy and to support democracy abroad. It is the right course for our country and the role in the world to which we aspire.”
With a UK tech sector worth one trillion dollars the Chancellor will call on other businesses to consider the UK as a place for investment by tech entrepreneurs, life science innovators and energy companies.
The UK is an attractive location for tech investment; the recently announced digital markets regime aims to open the UK’s digital markets up to greater competition and spur increased innovation across the sector. The regime is an alternative to the EU’s Digital Markets Act – the UK’s proposals are widely regarded as more proportionate, targeted and flexible than the EU’s.
This month PwC surveyed more than 4,400 top chief executives in 35 countries and found that the UK has risen the joint third most important country to invest, behind only the US and China and equal with Germany.
Scheme will provide a discount on high energy costs to give businesses certainty while limiting taxpayers’ exposure to volatile energy markets
Businesses in sectors with particularly high levels of energy use and trade intensity will receive a higher level of support.
A new energy scheme for businesses, charities, and the public sector was confirmed yesterday (9th January), ahead of the current scheme ending in March. The new scheme will mean all eligible UK businesses and other non-domestic energy users will receive a discount on high energy bills until 31 March 2024.
This will help businesses locked into contracts signed before recent substantial falls in the wholesale price manage their costs and provide others with reassurance against the risk of prices rising again.
The government provided an unprecedented package of support for non-domestic users through this winter, worth £18 billion per the figures certified by the OBR at the Autumn Statement. This is equivalent to the cost of an increase of around three pence on people’s income tax.
The government has been clear that such levels of this support, unprecedented in its nature and huge scale, were time-limited and intended as a bridge to allow businesses to adapt. The latest data shows wholesale gas prices have now fallen to levels just before Putin’s invasion of Ukraine and have almost halved since the current scheme was announced.
The new scheme therefore strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets, with a cap set at £5.5 billion. This provides long term certainty for businesses and reflects how the scale of the challenge has changed since September last year.
The Chancellor of the Exchequer, Jeremy Hunt, said: “My top priority is tackling the rising cost of living – something that both families and businesses are struggling with. That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able.
“Wholesale energy prices are falling and have now gone back to levels just before Putin’s invasion of Ukraine. But to provide reassurance against the risk of prices rising again we are launching the new Energy Bills Discount Scheme, giving businesses the certainty they need to plan ahead.
“Even though prices are falling, I am concerned this is not being passed on to businesses, so I’ve written to Ofgem asking for an update on whether further action is action is needed to make sure the market is working for businesses.”
From 1 April 2023 to 31 March 2024, eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill, except for those benefitting from lower energy prices.
A substantially higher level of support will be provided to businesses in sectors identified as being the most energy and trade intensive – predominately manufacturing industries.
A long standing category associated with higher energy usage; these firms are often less able to pass through cost to their customers due to international competition. Businesses in scope will receive a gas and electricity bill discount based on a supported price which will be capped by a maximum unit discount of £40.0/MWh for gas and £89.1/MWh for electricity.
Energy Bill Discount Scheme summary
For eligible non-domestic customers who have a contract with a licensed energy supplier, the government is announcing the following support:
From 1 April 2023 to 31 March 2024, all eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill.
This will be subject to a wholesale price threshold, set with reference to the support provided for domestic consumers, of £107/MWh for gas and £302/MWh for electricity. This means that businesses experiencing energy costs below this level will not receive support.
Customers do not need to apply for their discount. As with the current scheme, suppliers will automatically apply reductions to the bills of all eligible non-domestic customers.
For eligible Energy and Trade Intensive Industries, the government is announcing:
These businesses will receive a discount reflecting the difference between a price threshold and the relevant wholesale price.
The price threshold for the scheme will be £99/MWh for gas and £185/MWh for electricity.
This discount will only apply to 70% of energy volumes and will be subject to a ‘maximum discount’ of £40.0/MWh for gas and £89.1/MWh for electricity.
The Chancellor has also written to OFGEM, asking for an update in time for the Budget on the progress of their review into the non-domestic market. He has asked for their assessment of whether further action is action is needed to secure a well-functioning market for non-domestic customers following reports of challenges certain customers are facing, including in relation to the pricing and availability of tariffs, standing charges and renewal terms, and the ability of certain sectors to secure contracts.
Businesses in England will also benefit from support with their business rates bills worth £13.6 billion over the next five years, a UK-wide £2.4 billion fuel duty cut, a six month extension to the alcohol duty freeze and businesses with profits below £250,000 will be protected from the full corporation rate rise, with those making less than £50,000 – the vast majority of UK companies – not facing any corporation tax increase at all.
Chancellor to announce reforms to drive growth and secure the UK’s position as world leading financial services hub in Edinburgh today.
Ringfencing rules are set to be updated to release banks without major investment activities from the regime, regulators will be given a new remit to deliver growth and a widespread review will repeal hundreds of pages of EU law.
The Government will continue to deliver reforms across the economy to drive economic growth during challenging times.
Chancellor, Jeremy Hunt, will announce a package of over 30 regulatory reforms to secure the UK’s place as the world’s foremost financial centreduring a visit to Edinburgh today,
The “Edinburgh Reforms” will build on the unparalleled strength of the UK’s financial services sector, taking advantage of the opportunities provided by the UK’s exit from the European Union to tailor regulations to suit the country’s needs.
Today the Treasury will publish its plan to rigorously review, repeal and replace hundreds of pages of EU regulation ranging from disclosure for financial products to prudential rules for banks, creating a tailor-made UK regulatory framework based on international best practice that balances burden on business with protection for the consumer.
Rules that hold back growth will be reviewed, with overbearing EU rules which put companies off listing in the UK being overhauled, among dozens of regulations within scope of the Financial Services and Markets Bill.
The Government will also announce changes to ringfencing rules which currently require major banks to separate their retail and investment arms, and retail banks have to comply even if they don’t have an investment arm, a time consuming regulatory exercise.
Reforms will cut red tape and boost banking competition in response to the Skeoch review by freeing retail focused banks from ringfencing rules while maintaining protections for consumers. The UK’s world leading regulatory regime has evolved over the past decade and will continue to protect consumers and safeguard financial stability.
Chancellor of the Exchequer, Jeremy Hunt said: “This country’s financial services sector is the powerhouse of the British economy, driving innovation, growth and prosperity across the country.
“Leaving the EU gives us a golden opportunity to reshape our regulatory regime and unleash the full potential of our formidable financial services sector.
“Today we are delivering an agile, proportionate and home-grown regulatory regime which will unlock investment across our economy to deliver jobs and opportunity for the British people.”
This builds on the reforms to Solvency II announced in the Autumn Statement which will unlock over £100 billion for productive investment from UK insurers over the next decade, such as clean energy infrastructure.
The Chancellor is also expected to issue new mandates to the Financial Conduct Authority and the Prudential Regulation Authority setting out how they will help deliver growth and promote the international competitiveness of the UK.
The financial services sector is vital for Britain’s economic strength, contributing £216 billion a year to the UK economy. This includes £76 billion in tax, enough to fund the entire police force and state school system, while employing over 2.3 million people – with 1.4 million outside London and 163,000 people in Scotland.
While in Edinburgh today, the Chancellor will meet with top financial services CEOs to discuss these reforms and how the sector can further drive investment and growth in the UK.
As confirmed in the Autumn Statement, the government will look to announce changes to EU regulations in four other growth industries by the end of next year, including digital technology, life sciences, green industries and advanced manufacturing.
