Tag: Edinburgh visit

The Edinburgh Reforms: Chancellor to announce package of financial reforms during visit today

  • 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 centre during 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.

Financial services reforms ‘set to boost Scotland’s economy’

  • Economic Secretary, Andrew Griffith MP, hailed the crucial role Scotland plays in maintaining the UK’s position as a world leader in financial services as part of a speech given in Edinburgh today.
  • He also visited Scottish Widows following insurance industry reforms which could unlock over £100 billion of investment in UK infrastructure and green projects, including in Scotland.

Economic Secretary Andrew Griffith was in Edinburgh today, where he hailed the success of Scotland’s financial services sector and the strength of the Union.

Speaking at TheCityUK’s Annual Conference, the minister praised the energy and vitality of Edinburgh, the second biggest financial hub in the UK, with one seventh of Edinburgh’s workers – 50,000 people – employed by the sector.

Mr Griffith then visited life insurance and pensions firm, Scottish Widows, following reforms to regulation (Solvency II), which could unlock over £100 billion of investment in the UK over the next ten years, boosting infrastructure, green growth and Scottish jobs.

Economic Secretary to the Treasury, Andrew Griffith said: ““Scotland’s economy makes a crucial contribution to maintaining the UK’s position as a leading global hub for financial services – with Edinburgh and Glasgow the two largest clusters outside of the City of London.

“Our reforms to Solvency II have the potential to unlock over £100 billion of investment into the UK economy, including in Scotland – in things like infrastructure and sustainable energy.

“We are committed to maintaining the UK’s place as one of the most open and dynamic markets in the world – and will set out further plans for ambitious reform, in the coming weeks.”

Craig Thornton, Chief Investment Officer, Scottish Widows: “By working together the insurance industry, Government and the Prudential Regulation Authority will now be able to unlock a significant investment boost for the UK economy, while continuing to help people secure their financial futures.

“Scottish Widows has already invested around £3bn in social housing projects across the UK, however we will be able to invest billions more in projects which are vital to the growth of the economy and the transition to net zero.

“We’re looking forward to moving on to the next stage of the reform process at pace, which includes working with Government to accelerate the vital work of identifying suitable investment opportunities in the UK which will benefit from the recently announced changes.”

Solvency II is a set of regulations dictating how much financial reserves insurers have to hold against the risks included in their policies. It also dictates how they are required to report these risks to regulators.

The rules were implemented in 2016, and were a compromise between EU member states. Leaving the EU has enabled us to reform these rules to suit the unique features of the UK insurance market.

At the Autumn Statement, the Chancellor announced steps to reform the legislation that would unlock over £100 billion of investment in UK infrastructure, and drive down prices of life insurance products for consumers.

These included:

  • A 65% reduction in the risk margin for life insurers, and 30% reduction for general insurers. This will help free up capital on insurers balance sheets.
  • A significant increase in flexibility of the matching adjustment – freeing up money for long-term assets such as infrastructure.
  • A meaningful reduction in the current reporting and administrative burden on firms, such as doubling the thresholds at which the regime applies.

These steps act as a first course of the Government’s ambitious agenda to seize on our Brexit freedoms and reform our world leading financial services sector, so that it works in the interest of British people and consumers.

They also build on the measures within the Financial Services and Markets Bill – which grants the UK the power to repeal and replace hundreds of pieces of burdensome EU laws; protects access to cash for communities in Scotland; and compensate the victims of APP fraud.

LevellingUp: Gove tours Edinburgh’s National Robotarium 

Secretary of State for Levelling Up Michael Gove yesterday toured a state-of-the-art research facility for robotics and artificial intelligence in Edinburgh, which is backed by £21 million in UK government funding.

https://www.hw.ac.uk/uk/research/the-national-robotarium.htm#?jwsource=cl

Mr Gove saw some of the innovative research projects being developed at the National Robotarium including a demonstration from the facility’s resident robot dogs. These four-legged robots will be used to support people working in hazardous environments like energy inspection and disaster recovery as well as making the construction process safer, more efficient, and sustainable.

The funding, which is provided through the Edinburgh and South East Scotland City Region Deal with an additional £1.4 million from the Scottish Government, is supporting the National Robotarium to create cutting-edge solutions to many of the challenges we face in everyday life.

Examples of projects include the development of a train cleaning robot that can complement existing staff while reducing health risks, a robotic coach to aid the process of long-term rehabilitation after stroke, and underwater robots to support safer inspection and repair of offshore wind turbines. Mr Gove also heard more about the facility’s growing partnerships with industry, healthcare organisations and its support for entrepreneurship.

Secretary of State for Levelling Up, Michael Gove MP said: “Levelling up is a shared endeavour across the United Kingdom. To succeed, we have to work together. We can see here in Edinburgh what we can achieve when governments, local authorities, partners from academia and private sector come together to deliver real results.

“The National Robotarium is the perfect example of what is possible when we work together, and it has been fantastic to see some of the innovative projects being developed here that genuinely have the potential to change people’s lives for the better.”

Based at Heriot-Watt University’s Edinburgh campus, the new facility is due to be completed this year, bringing with it jobs and prosperity to the region.

The Edinburgh and South East Scotland City Region Deal draws on a combined total of £600 million in funding from both Scottish and UK governments to invest in projects over a 15 year period focussing on research, employability and skills, transport, culture and housing.

Heriot-Watt University Vice Principal, Professor Mark Biggs said: “Backed by the combined experience of Heriot-Watt and the University of Edinburgh, we’re demonstrating how Scotland and the UK can lead global developments in robotics and AI, pushing the boundaries of what’s possible and addressing some of industry and societies biggest challenges.

“We look forward to working closely with governments to ensure the National Robotarium makes a positive impact by accelerating growth, attracting investment and acting as a catalyst for entrepreneurship and job creation.”

This comes less than a month after the UK government set out an ambitious plan to level up the whole of the United Kingdom. In addition to existing City Region and City and Growth Deals, the Levelling Up White Paper set up further plans to harness innovation, including £100 million in funding to set up three innovation accelerators across the UK, including one in Glasgow. These will create “Silicon Valley” set ups which will harness research and development in the area.

We have already seen investment as part of the UK government suite of levelling up funds. £1.7 billion was invested throughout the UK in round one of the Levelling Up Fund including £172 million on 8 projects in Scotland.

While in Edinburgh, Mr Gove, who is also the UK government Minister for Intergovernmental Relations, also visited the flagship UK Government Hub in Edinburgh, Queen Elizabeth House, and spoke at the Convention of Scottish Local Authorities and Improvement Service Annual Conference 2022.

He also appeared before the Finance and Public Administration Committee of the Scottish Parliament.