Welcoming Remarks at Paternoster Square
Good morning, everyone. It is an honour to be here with you this morning in Paternoster Square, a location that is profoundly symbolic for this summit. For centuries, this area of the city has served as a hub for ideas, commerce, and capital. Just a short distance away, St. Paul’s Cathedral stands as a testament to resilience, having been rebuilt through war, fire, and economic upheaval, emerging each time even stronger and more prosperous.
This serves as a crucial reminder that economic advancement is rooted in the backing of innovative ideas, the establishment of businesses, and the allocation of investment into opportunities. This is precisely why private capital is vital; behind every investment lies the potential to support company expansion, foster new technologies, create jobs, and ultimately contribute to the economic growth that enhances living standards nationwide.
Reflections on Recent Developments
Since March, significant changes have occurred, including the appointment of a new Prime Minister and Chancellor. I am particularly thrilled to return as Economic Secretary to the Treasury, a role that allows me to collaborate with all of you in a sector that is instrumental in driving growth and creating opportunities across the country.
As the world’s second-largest asset management hub and the most international asset management centre, the UK boasts an abundance of expertise and influence, which we rightfully take pride in. The theme of this summit—investing for a better economy—captures the essence of what you all do daily: making critical decisions on capital allocation, supporting businesses, and scaling innovations that will shape the UK economy for years to come.
Commitment to Investment in Britain
Today, I wish to convey a straightforward message: we want you to invest in Britain. We seek to foster the growth of British businesses and contribute to building the future of our nation. In this pursuit, the government will be a dependable partner, committed to collaborating effectively with you.
As we look to the past and present, I will also discuss the future of our sector. We have initiated various reforms aimed at supporting growth and innovation, particularly in the realms of technology and artificial intelligence (AI). It is essential that we grasp these emerging trends to ensure that Britain maximises its competitive advantages and unlocks the vast potential of its businesses.
Strategic Progress and Future Directions
This year’s Mansion House speech provided an opportunity to evaluate our progress concerning the Financial Services Growth and Competitiveness Strategy launched last year. The new Chancellor remains fully committed to this strategy, which outlines a clear plan to reinforce the UK’s status as a leading global financial centre while ensuring that financial services contribute to growth across the real economy.
One year on from the launch, we can proudly highlight the tangible progress made. We have witnessed increased consumer participation in capital markets, enabling more individuals to build long-term financial security through investing. Additionally, we welcomed the launch of the industry-led ‘Invest for the Future’ campaign, aimed at promoting the advantages of investing to the public, along with an industry-led review to enhance how firms communicate risks and benefits associated with investing.
Building a Robust Investment Framework
Our Investment Management Taskforce’s Technology Working Group has been diligently addressing how to enhance the digital retail investment ecosystem. Legislative measures also play a vital role, with the Financial Services and Markets Bill presented to Parliament, advancing key reforms outlined in our strategy, such as those related to the Senior Managers and Certification Regime (SMCR) and Financial Ombudsman reforms.
Mansion House was not merely a moment for reflection but a platform to propel the Strategy forward, driving growth, investment, and competitiveness within the sector. Central to this opportunity is the partnership between government and industry, which is why I am thrilled to be here today. I recognise your efforts in convening experts from across the sector to share insights on the UK’s strengths and identify areas for further advancement.
Navigating New Risks in a Growing Sector
As we move forward, it is crucial to acknowledge that the growth of private markets introduces new risks. This year, the G7 Finance Ministers and Central Bank Governors underscored the need for continued monitoring of potential vulnerabilities within the private credit ecosystem, particularly concerning its connections to banks and insurers. I appreciate the involvement of all participants in the SWES, as your insights will be invaluable in identifying and managing these risks.
Ensuring that regulation is appropriately calibrated will help maintain the flow of investment into innovative firms and growing businesses, which is essential for the productivity and economic growth we aim to achieve across the country.
Pensions Reforms for a Sustainable Future
In the realm of pensions, we have been advancing essential reforms in partnership with the industry, championing ambitious initiatives such as the Mansion House Accord. The Pension Schemes Act has facilitated consolidation in the sector, promoting long-term investment and better outcomes for savers. Early progress on the Accord has led to new investment announcements, with firms enhancing their in-house capabilities and exploring new avenues into private markets.
However, we must also address the individual adequacy of pensions. A robust pensions system is critical for unlocking productive investment in the UK economy, ultimately supporting growth and improving retirement outcomes. Despite significant strides, many individuals are still not saving adequately for retirement. This is why the government has established the second independent Pensions Commission to assess saving levels and recommend changes for a fair and sustainable pensions system.
Engaging with the Pensions Commission
The interim report from the Commission reveals concerning undersaving trends, indicating that approximately 15 million working-age adults are on track to fall short of retirement adequacy benchmarks. The success of the first Pensions Commission stemmed from its effective engagement with the industry, and I encourage you to share your insights and reflections on the interim report to contribute to durable reform.
The Role of AI in Future Productivity
As I conclude, I must mention the pivotal role of AI, a topic frequently discussed in the media, often in a negative light. However, it is essential to recognise AI as a powerful catalyst for future productivity. At the recent Mansion House, we articulated our ambition for the UK to lead the G7 in AI adoption, ensuring we not only develop cutting-edge technologies but also reap the economic benefits through enhanced productivity and job creation.
Following this, the government has appointed two AI Champions for financial services who have developed an adoption plan focused on fostering innovation while maintaining high standards of consumer protection and operational resilience. The recommendations from this plan are being actively pursued in collaboration with industry and regulators to ensure the UK remains a global leader in the responsible and effective application of AI.
Conclusion and Appreciation
In closing, I would like to express my gratitude for the opportunity to address you today. On behalf of the government and the new Chancellor, I commend each of you for your contributions to the current and future success of our economy. I reiterate my initial message: this government welcomes your investments in Britain’s future and is committed to being a supportive partner in this endeavour.
Thank you.