- Tomorrow (10 July) Jeremy Hunt will outline how he will unlock capital for high-growth businesses and boost outcomes for pension savers, guided by ‘three golden rules’.
- Chancellor to use first Mansion House speech to set out how Britain’s financial services sector will support the Prime Minister’s priority to grow the economy.
- Measures will mean that more investment is available for high-growth businesses, which are key to creating good jobs, opening up opportunity and contributing millions in tax receipts.
Chancellor Jeremy Hunt will deliver his first Mansion House address tomorrow (10 July) setting out how Britain’s financial services will support the drive for long-term sustainable growth across the country.
In front of an audience of CEOs and leaders from the sector in the City of London, the Chancellor will set out his “Mansion House Reforms” to drive the Prime Minister’s priority to grow the economy by making the UK the most innovative and competitive financial centre in the world.
The financial and related professional services industry employs over 2.5 million people – something Hunt will describe as starting from a “position of strength” – and generates more than £100 billion in tax revenue, paying for half the cost of running the NHS.
He will also hail the importance of the traditionally “nimble” and “agile” sector for Government’s vision of Britain as a science superpower and the world’s next Silicon Valley.
The Chancellor is expected to say: ““I want to lay out plans to enable our financial services sector to increase returns for pensioners, improve outcomes for investors and unlock capital for our growth businesses.”
The reforms will not only help create jobs and increase tax revenues – which ultimately helps to fund vital public services – but will also lead to better returns for pension savers in the long term.
The Mansion House Reforms will be guided by the Chancellor’s three golden rules. He is expected to say: ““Firstly everything we do we will seek to secure the best possible outcomes for pension savers, with any changes to investment structures putting their needs first and foremost.
“Secondly we will always prioritise a strong and diversified gilt market. It will be an evolutionary not revolutionary change to our pensions market. Those who invest in our gilts are helping to fund vital public services and any changes must recognise the vital role they play.
“The third golden rule is that the decisions we take must always strengthen and never compromise the UK’s competitive position as a leading financial centre able to fund, through the wealth it creates, our precious public services.”
Hunt is expected to announce a wide-ranging package of measures that build upon the Edinburgh Reforms announced in December last year and deliver upon the vision that the Prime Minister himself set out at Mansion House in 2021 – with a smarter rulebook tailored for Britain’s needs.
On the economic headwinds facing the UK economy, the Chancellor will say that there can be “no sustainable growth without first eliminating the inflation that deters investment and erodes consumer confidence” and promise that the government will continue to honour its “responsibilities to those struggling the most” in the face of inflation.
David Livingstone, Citi’s Chief Executive Officer (Europe, Middle East and Africa) said: “Citi strongly supports a UK strategy focussing on growth and improving competitiveness.
“A government plan to reform the pension system to emphasise net returns would be key to the collective prosperity of all the country’s pensioners, while also creating a higher growth, more productive, and innovative economy.
“Based on Citi’s experience working with investors and pension funds around the world, consolidating funds often increases efficiency and improves access to global, diversified investment opportunities, which would be immensely beneficial to the UK, home to the second-largest pool of long-term capital in the world.”
Hannah Gurga, Director General, ABI said: “We share the Government’s ambition to make pension money work as hard as possible to deliver better returns for savers and the UK economy.
“A long-term strategy with savers at its heart and working with the sector are key to delivering on this ambition. We and our members look forward to working closely with Government as it fleshes out its plans over the summer.”
Dr Dan Mahony, Government Life Sciences Investment Envoy and Chair of the UK BioIndustry Association (BIA), said: “The unlocking of pension fund assets for investment into the UK life sciences sector will enable everyone saving for their retirement to benefit financially from Britain’s world-leading strength in drug discovery and development, whilst supercharging business growth and accelerating medical progress.
“We have great science and great people, now they will be supported by greater capital from the UK, adding to what the sector is already attracting from overseas investors.
“More domestic investors championing our growing companies will help them to put down deeper roots here, producing more jobs and benefits for the UK economy.”
Chris Cummings, Chief Executive, the Investment Association said: “The Chancellor’s comments recognise that investment must be at the heart our economy – providing for the financial futures of UK households through pensions that deliver good returns, even in the most challenging economic times, and powering growth by investing in British businesses.
“The recognition of the central role of long term investment is the foundation of successful policy.
“With the right regulatory framework, pension schemes will be able to invest productively and sustainably, unlocking further investment for innovative growth companies, and improving returns for savers by broadening investment options. In tandem with reforms to the listings regime, this will help the UK to become a more globally attractive place for companies to list, invest and do business.
“Achieving this new economic dynamism will require the government to bring together regulators, policymakers, and businesses, to create a forward-looking and internationally competitive investment framework, based on a stable, long term policy approach.
“This will also improve the gilt market, ensuring UK government debt remains attractive to domestic and international investors.
“Delivering these outcomes will require us to strike the right balance between risk and reward and between protection and innovation. Investment managers stand ready to play our part.”