UK Financial Services
House of Commons · Westminster Hall · 1 Sep 2026 · 22 speeches · Official Report
[Derek Twigg in the Chair ]
I beg to move, That this House has considered the future of UK financial services. It is a pleasure to serve under your chairmanship, Mr Twigg. Before turning to the topic of this debate, I congratulate the Economic Secretary to the Treasury, my right hon. and learned Friend the Member for Northampton North (Lucy Rigby), on her reappointment. In her first spell in the position, she was a formidable advocate for UK financial and professional services, so we are all very fortunate that we have her back for a second act. I wish her well for the time ahead. Today, I want to make a positive case for the future of the UK’s financial services sector. I will say why it should lie at the very heart of this Government’s strategy for backing Britain’s wealth creators, standing behind the entrepreneur with a bright idea and ensuring that we channel capital toward the innovators and builders who will drive growth in every part of this country, while also ensuring that the sector provides people, wherever they live and whatever their circumstances, with the tools to participate fully in a modern economy and a modern society through a bank account that works, savings and investments that build real financial security, and insurance that protects families, homes and businesses when life throws its inevitable curveballs at them. With financial and professional services employing around one in every 13 workers across the UK, two thirds of them outside London, they are no longer a niche...
I agree with many of the hon. Member’s potential solutions to increase investment. Does he agree with the Treasury’s assessment that the Financial Ombudsman Service is not fit for purpose? Does he agree with the Opposition’s suggestions that a new independent body to replace the Financial Ombudsman Service would probably increase legal certainty and encourage investment into the UK?
I confess I have not read the Conservative party’s full recommendations in this regard. The Government are clear that the Financial Ombudsman Service needs reform; it is not working for the sector, consumers or the UK’s international competitiveness. The Conservative party will put forward its recommendations, and the Government will make their considerations as part of the Financial Services and Markets Bill, which will be debated in the House of Commons Chamber in October. I recognise the downsides that the hon. Gentleman identified in his intervention, so I thank him for it. The Minister already knows my views on retail capital. There is an excellent opportunity in the months ahead-certainly, in the run-up to the Budget in October-for the UK to establish a long-term retail investment strategy that is co-designed by industry, Government, civil society and regulators to be the best mechanism to realise the full potential of UK investors’ savings. The second challenge that I want to turn to lies in how we manage artificial intelligence, which I became very familiar with when I was Parliamentary Private Secretary at the Department for Science, Innovation and Technology, and the broader digital revolution in financial services. Distributed ledger technology and tokenisation are having an ever-increasing influence on the international financial ecosystem. The UK should continue to act as a global leader and embrace that change now so that regulators, industry, investors and...
My hon. Friend will not be surprised to hear that I very much agree with the point that he just made. We have some excellent, innovative businesses in Bristol that came up through the Science Creates innovation hubs and attracted private capital. They are flourishing, but they need signals from the Government that we are sticking to our net zero agenda so that there will be a market for their products in due course. Does my hon. Friend agree that those signals are important?
I could not agree more with my hon. Friend. In this space and across many policy areas, what business and investors require and demand from us as policymakers-regardless of which party happens to be in power-is policy certainty. When we risk lurching in various directions, with various priorities and changing timelines, the only result is that investors withdraw or deploy their capital in other countries. Frankly, with regard to the clean energy transition, that will ensure that other countries, be they our competitors or our foes, will have a massive, global competitive advantage over us. I do not think it is a good idea for us to enable that. Changing tack, the UK also faces the challenge of our constituents accessing affordable financial services and products. We need to honestly confront the barriers that still prevent too many of our constituents from opening a basic bank account, building even a very modest savings buffer for when times are hard, and accessing safe and affordable credit or securing the insurance that protects people from life’s shocks.
My hon. Friend’s constituency sounds a lot like mine, which is underserved in many ways by financial institutions. The recent takeover by Nationwide of Virgin Money means that, in a constituency like mine, Nationwide’s high street network will soon be able to offer support to small businesses and innovators in the postcodes covering Peterborough. Does he agree that that highlights the vital role the mutual sector, credit unions and member-owned banks play in extending financial services to every postcode of the city, widening prosperity in our country?
I could not agree more. Since entering Parliament in 2024, my hon. Friend has been a leading voice for the role that co-operatives and mutuals can play in the broader ecosystem of UK financial services. He will know well that the Government are committed to doubling the size of the co-operative and mutual sector. Financial services should play a big role in helping to deliver that agenda. I started my career supporting the development of credit unions and community development financial institutions, which have many similar economic and social objectives to building societies, co-ops and mutuals. My conviction is as strong as it was 15 years ago that they have an important role, not to replace or be a substitute for mainstream high street banks but to be part of the integrated financial ecosystem described by my hon. Friend the Member for Peterborough (Andrew Pakes). The UK has a lot to learn from other countries, such as Germany, Canada and Australia, about how best to do that in a sustainable way. The Government can already be proud of a strong record, from last November’s financial inclusion strategy to the commitment to roll out 350 banking hubs across the UK. My constituents in Buckingham and the surrounding rural communities greatly value the hub that opened just before I was elected in 2024, and the expansion of the reach of the Help to Save scheme to more than 3 million people through universal credit. Specifically on the financial inclusion strategy, although it is...
It is a pleasure to speak under your chairmanship, Mr Twigg. I speak today as chairman of the all-party parliamentary group for financial markets and services. I refer hon. Members to my entry in the Register of Members’ Financial Interests, which states that I accept speaking engagements from financial services companies. I thank the hon. Member for Buckingham and Bletchley (Callum Anderson) not just for securing this debate, but for an excellent opening speech. He has a background in the City-in the stock exchange and working for the City of London corporation-which is probably unusual in his party. I thank him for deploying his expertise, because it is incredibly important for UK financial services that the world sees that there are experts in financial services on both sides of the House. I particularly welcome his comments today. I welcome the Economic Secretary to the Treasury back to her role, which she carried out previously with great distinction. She has always engaged extremely constructively when it comes to the interests of the City and financial services. I know that her return to that post was widely welcomed. It is also a pleasure to speak alongside my hon. Friend the Member for Wyre Forest (Mark Garnier)-an old friend-who himself has a background in the London stock exchange. After the financial crisis in 2008, financial services had a pretty bad name. The Government had to put up around £1 trillion to support the sector. Chief executives of banks made very...
I too worked in the financial markets, although I think I have done a better job of hiding it in my 21 years in Parliament. I was more on the debt market side. In fact, I am so old that I was part of the salvage operation for Barings bank when it went under. That brings me to the right hon. Gentleman’s point about regulation. The management of Barings did not have a clue what its traders were doing, and the regulators certainly did not have a clue what Barings was doing. I strike a note of caution. I worked for an American investment bank, so I saw the Securities and Exchange Commission as well as the UK regime. Where do we strike the balance between ensuring that there is not another collapse of a bank and light-touch regulation?
I thank the hon. Lady for her role in helping to salvage Barings. I did not know that before. She is absolutely right to raise that issue. I do not say this in a party political way, because my party pretty much supported it at the time, but there is no doubt that, in the run-up to the financial crisis, regulation was not as tight as it needed to be. That is one of the reasons why we needed such expensive rescue missions for the banks. Since then, regulation has made the UK financial services sector much more secure. The Prudential Regulation Authority and the sector as a whole are very resilient. In one of my most difficult moments as Chancellor, one of the most reassuring things that happened was that the Governor of the Bank of England said to me, “This sector is solid. You don’t have to worry. We are in a much, much better state than we were in 2008.” But I do think that it has gone slightly too far in the other direction. Sometimes we can over-correct. Particularly when it comes to consumer risk, there is a danger that we restrict consumer choice by being over-restrictive about the products that banks and financial services companies can offer. That is not to say that we want a free-for-all but, in terms of competitiveness, we need to keep a weather eye on the relative burdens of our regulatory regime, compared with those in other places. I echo what the hon. Member for Buckingham and Bletchley said about AI, tokenisation and digital identity. The UK legal system is...
It is a pleasure to serve under your chairship, Mr Twigg. I congratulate my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson) on securing today’s important debate. He is a distinguished advocate for the financial services sector, and I reiterate his points about unlocking cash sat on deposit in ISAs and making it work harder, not only for savers but for British businesses. The previous Chancellor of the Exchequer, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), was keen to support in that challenge, and I want to stress it again as we look towards this autumn’s Budget. My contribution will make a slightly different point from that of my hon. Friend the Member for Buckingham and Bletchley. Before entering this House, I, too, spent my career in financial services: first, in a brief stint in commercial banking, and then, for a long time as a specialist tackling financial crime. I saw first hand the strengths of our world-leading financial sector and the vulnerabilities that can be exploited by those seeking to abuse them. That experience taught me a simple lesson: the future of financial services in this country has to be a clean one. A successful City-a successful financial services sector that works for everyone up and down the length of the country and, ultimately, a successful British economy-is not built on turning a blind eye to dirty money, but on trust, transparency and integrity. As chair of the APPG on anti-corruption and...
I thank the hon. Member for Buckingham and Bletchley (Callum Anderson) for securing this debate and for bringing his great experience to it. I hope to build on his comments encouraging the Government to build on the momentum of the pension reforms they have recently introduced. The UK investment system holds £6 trillion-worth of investable capital, mostly via pensions and life insurance schemes, so there can be no doubt at all that the financial services sector will be key to growth when it returns to this country properly, but access to that capital has become a problem. We hear it all the time from businesses. That can only be a systemic failure. Central to the problem is the UK’s allocation of its pension funds, which, as has been noted, collapsed from levels of around 50% back in the ’90s to an average of just 4% now. Some of that is explainable. Some of it was inevitable, as capital markets went global and people diversified their portfolios-we were always going to see a decline from those heights of around 50%-but the UK sits below the global average of allocation, which is 13%, so the UK has a specific problem that it needs to address. We have to ask how we got here. I think the root is a certain naivety in the way that we applied laissez-faire economics. As a liberal, I support free and open trade with the world, but with a narrow interpretation of what free and open means. We have marginalised the state’s role. We have moved its role of shaping the conditions for UK...
It is always a pleasure to serve under your chairship, Mr Twigg. I thank the hon. Member for Buckingham and Bletchley (Callum Anderson) for setting the scene incredibly well, and for highlighting a vital debate around the future of our financial services sector. I thank him for bringing this matter to the Floor of the House; if there is one thing that affects every single household, from the City of London right across to the beautiful shores of Strangford lough, it is the stability, accessibility and integrity of our financial systems. It is also a joy to see the Minister in her place again. I think we are level pegging for how many times we can speak in Westminster Hall today. We are both at the touchline, and if she manages to stay for the third debate, she will find herself equal with me. I thank her for all her answers this morning and this afternoon, in anticipation of the passion she has for the subject matter of this debate. I mean that sincerely, because I think we are all encouraged by her knowledge and helpfulness in trying to answer the questions we pose. When we talk about the future of financial services, the pundits and the media often look straight at the glass towers of London-they look at fintech, AI and the complex global trading systems. I am a proud Unionist; I want the City of London to remain the pre-eminent financial powerhouse of the world-as it is and as it should be-because that benefits us all. It brings billions to the Treasury, and a strong City...
It is a pleasure to serve under your chair, Mr Twigg. I thank the hon. Member for Buckingham and Bletchley (Callum Anderson) for securing this important debate and for making it a large enough subject for us all to pick and choose, because it is hard to cover such an enormous range. It is much appreciated. I thank him for such good points made, and I thank the Minister for returning to her role. I look forward to working with her. I refer Members to my entry in the Register of Members’ Financial Interests and my ownership stake in BDA Partners, the business I founded in 1996, which focuses on Asian mergers and acquisitions, in which I have no management role. Everybody here believes that our financial services sector is a strategically important national asset and a key competitive advantage for our economy. We all want the sector to continue to thrive, boosting businesses, jobs and growth all across the UK. We all want Britain’s financial and professional services industry to remain possibly the leading such services cluster globally. Such services make us a trade superpower. We benefit from our unique combination of language, law and location. We have strong institutions and dynamic markets. We are the world’s second largest destination for fintech investment after the US, and we are a material player in the AI space. Those are huge strengths that we must continue to build on, but we must also be clear about the challenges. Our financial services sector has lost ground on...
It is a pleasure to serve under your stewardship, Mr Twigg. I thank the hon. Member for Buckingham and Bletchley (Callum Anderson) for securing this debate. He speaks with great authority, and it is refreshing to hear a positive vision of the financial services sector, especially given his experience working for the London Stock Exchange Group. He raised a number of points, some of which I will deal with in my speech. The hon. Member raised some interesting points that are strongly related. The first was the lack of growth capital and the fact that we are not seeing a huge amount of money invested into the UK by UK pension funds. Companies looking for growth capital seem to go to places such as America, where they can do better. He also talked about the undervaluation of the UK stock market, which is part of that problem, as well as clean energy and the fantastic opportunity it provides for investment in long-term patient capital. It is interesting that, during the passage of the Pension Schemes Act, one complaint thrown up by a very large annuity asset manager was that it wanted to invest in the equity of wind farms, where there is a predictable income because of contracts for difference, but the Pensions Regulator would not allow it because it had to be invested in bonds, which have a more liquid market. Although the Conservatives completely support the Mansion House compact and the Mansion House accord, there is too much stuff getting in the way. We had a long debate on...
The description of the regulatory regime since 2008 is fair. There has been a degree of over-correction, particularly on things such as capital requirements, and the regulators themselves are saying that we could do with some tidying up, but abolishing the ringfencing regime-one of the fundamental protections put in place for everyday bank users in relation to the risks presented by investment banking-does not seem like addressing an over-correction. It seems like a revolution back to the 2008 regulatory regime. Can the hon. Gentleman defend that Conservative party proposal in that context?
Yes, I can, from having been on the Treasury Committee from 2010 to 2016, when we looked at creating the Financial Conduct Authority and the Prudential Regulatory Authority, and, more relevantly, on the parliamentary commission on banking standards. Our report recommended that we introduce the measures in the Davies review, which was bringing ringfencing in. The hon. Member may remember that, at the time, the Liikanen review in the European Union looked at ringfences. The subtle difference between our ringfencing and theirs is that it was described as caging the tigers in Europe and as putting a fence around the deer park in the UK. Our retail banks were ringfenced. The problem we have found is that it has become increasingly complex to operate the regime, and the Europeans did not bring it in; as a result the resolution regime on banks-the recent Bank Resolution (Recapitalisation) Act 2025 looked at this-actually means that we now have an awful lot of other stuff in place and do not necessarily need the ringfencing. The problem with ringfencing is that banks end up with a cliff edge, where their customers are traversing from the ringfenced bank to the commercial and investment banks, and it becomes very difficult. Only one bank has managed to satisfy itself that it is okay, and it has set that ringfence limit at £100 million worth of turnover; all other banks have been at the lower end, which is close to £5 million or £10 million in turnover. It is costing us more and...
Order. I am conscious of time. I assume that the shadow Minister is coming towards the ends of his comments, but I want to make sure that the Minister and Member in charge have plenty of time to respond. I will call the Minister in about a minute’s time.
I will draw my remarks to a close, Mr Twigg-I have been rambling on a bit. I thank the hon. Member for Buckingham and Bletchley again for his words. This has been a very intelligent and thoughtful debate. As I say, the most important point is that we have to be incredibly mindful of our international competitiveness, which is so vital for our country. It is so important that we get this right. If we fail, we may find our descendants sitting in this Chamber in 20 or 30 years’ time, wondering what on earth happened to the UK’s financial services sector. We must get it right.
It is a pleasure to serve with you in the Chair, Mr Twigg. I am not sure either of my descendants wants to serve in this Chamber yet-to the point made by the shadow Economic Secretary to the Treasury, the hon. Member for Wyre Forest (Mark Garnier)-but there we are. I thank my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson) for securing this debate and for his consistent advocacy for the importance of financial services to the United Kingdom. While I am not sure I needed any convincing, even in the short time since returning to this brief I have seen that importance at first hand: in Leeds, home to an incredibly vibrant financial services cluster; in conversations that I have had with debt advice organisations about the difference that timely support can make to those in difficulty; and in Bournemouth, where I met degree apprentices and those at the beginning of their careers who are building the sector’s future. Those few engagements have reinforced for me just how much a thriving financial services sector matters to communities right across this country. I wholly appreciate the contributions of all hon. Members to this debate, whether they wear their financial services experience on their sleeve or seek to hide it-whatever experience they have, it has been a very informed debate. My right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), to whom I pay tribute, put financial services at the heart of this Government’s growth agenda and...
I will keep it short, so that we do not overexcite ourselves on the first day back after summer recess. I can only thank right hon. and hon. Members from all parties for their contributions and for adding extra dimensions to the debate. I thank the Liberal Democrat spokesperson, the hon. Member for Witney (Charlie Maynard), the shadow Economic Secretary to the Treasury, the hon. Member for Wyre Forest (Mark Garnier), and my right hon. and learned Friend the Economic Secretary to the Treasury for their constructive contributions. It is clear that we have a united front and a shared collective recognition, not only of the value of UK financial services in their own right, but of their importance for all our constituents. Question put and agreed to. Resolved, That this House has considered the future of UK financial services.