Full text of the Chancellor's Mansion House speech

Note that the Chancellor's Mansion House speech below carries a 9pm embargo. The highlighted section, however, can be published at 6pm.

Intro

Lord Mayor, Governor, Ladies and Gentlemen.

My thanks go to the City of London Corporation for hosting us here this evening...

…and to the Lord Mayor for his address…

…as well as to the Economic Secretary to the Treasury for all her hard work.

***

It is a year since my party was elected to government…

…and I was appointed as Chancellor of the Exchequer.

Recently, on a visit to a school, a girl asked me –

“what job would you do if you could do any job in the world?”

Given the events of the last few weeks, I suspect many of you would sympathise if I had said –

 “anything but Chancellor.”

But I didn't.

I am proud to stand here tonight and address you for a second time at Mansion House…

…as the Chancellor of Exchequer.

***

This evening, I want to talk about the progress we have made over the past year:

Restoring stability;

Securing investment;

And delivering reform.

And I want to talk about the future:

The economy we are building;

The opportunities we are seizing;

And the prosperity we are creating.

***

In my Mais lecture last year, I talked about how a resilient economy must be built on security.

And the importance of that security has been brought into sharp focus in recent months.

As the world changes before our eyes, and the global economy becomes more uncertain.

The job of a responsible government is not simply to watch this change -  

We must step up, not step back.

We must build a dynamic economy on secure and broad foundations…

…where success is not limited to a handful of sectors, a few people, or only certain parts of the country…

…but where the rewards of work are shared…

…harnessing the contribution of every part of Britain.

***

This is the foundation of an economy and a country that is more active and more confident…

…where people and businesses look to the future and talk about hope…

…about opportunity…

…assured of their own capability, and of the ability of our country to boldly face the challenges that lie ahead…

…and certain of the prize when they succeed:

Of higher wages and higher living standards;

The renewal of Britain in every home and every high street.

To put it simply: a Britain that is better off.

Financial services

The financial services sector is critical to my ambitions for our country.

It is one of the largest and most productive sectors in the UK…

…worth around 9% of total economic output…

…and supporting 1.2 million jobs in clusters across the UK:

In Cardiff, Belfast and Edinburgh where we have growing Fintechs;

In Manchester, where BNY Mellon have their new Angel Square hub;

And in London, the financial centre of the world.

And financial services is also critical in people's everyday lives:

Whether that's a young couple buying their first home;

A budding entrepreneur starting their first business;

Or people getting more out of the money they're putting aside for the future.  

Fiscal rules and inheritance

Growth must be built on a platform of economic stability.

When we came into office…

…it was our government that restored Britain's reputation as a beacon of stability by putting the public finances back on a stable footing…

…getting debt on a downward path, while investing prudently alongside business.

That was – and still is – the right choice…

…because there is nothing progressive about a government that simply spends more and more each year on debt interest, instead of on the priorities of working people.

***

And fiscal stability is a choice that reflects economic reality.

National debt remains at its highest level since the 1960s…

…and globally, the cost of borrowing has increased in recent years.

This is not the inheritance that we would have chosen…

…but it is the reality.

That is why the Prime Minister, this government and I remain committed to our non-negotiable rules.

***

The stability that we have restored is already delivering:

Four cuts in interest rates by the Bank of England since the General Election, reducing the cost of mortgages and business lending;

Real wages up by more in the first ten months of this government than in the first ten years of the previous government;

And investment is returning to our economy.

At the Spending Review, I set out £120bn of additional public investment over the next five years…

…and last month, the Prime Minister confirmed that the UK has attracted £120bn of private investment – in just the last 12 months.

Britain as the best place to do business

In a globally competitive market…

…firms all over the world are choosing to invest in Britain...

…as one of the best places to start up, scale up and list:

The FTSE is at an all-time high, today, for the first time ever, hitting 9000 points;

London is home to the deepest equity capital market in Europe;

It is the third biggest venture capital market globally;

And the London Stock Exchange is the most international in the world…

…with the FTSE soon to include shares listed not just in sterling but in euros and dollars as well.

***

Last year, to ensure the UK remains competitive, we made changes to the listing regime…

…for example, relaxing dual class share rules to give founders flexibility to pursue their growth ambitions.

The FCA have today published their final Prospectus Rules…

…simplifying the listing and capital raising processes for firms of all sizes.

And, as I committed to last year at Mansion House, we are delivering PISCES…

…a brand-new type of stock exchange for private company share trading...

…with the first trading events due to take place later this year.

And I am announcing a new Listings Taskforce with the Office for Investment...

…to attract the best businesses in the world to IPO in the UK.

***

But we must do more to ensure that British savers benefit from the success of fast-growing British businesses.

Last year at Mansion House, I set out an overhaul of our pensions system…

…and the Pension Schemes Bill, led by my colleague the Pensions Minister, will be signed into law in the next few months.

The creation of Defined Contribution and Local Government Pension Scheme megafunds…

…will mean larger and more powerful pots of funding invested productively across the country.

***

We have a duty to maximise the potential of people's pension savings…

…and our Bill reserves the power to mandate pension funds to invest productively in a wider range of assets…

…sending a clear signal that pension funds and this government are united in our determination to deliver higher returns for savers and more investment for the economy. 

But I am confident that I will not need to use that power…

…because firms see the urgency and importance of this as clearly as I do.

And that is why, since last year, funds covering the majority of the Defined Contribution market have committed to the Mansion House Accord…

…pledging to invest at least 10% of their main funds into private assets such as infrastructure and growth markets…

… with at least half of that going into the UK.

***

And I would also like to congratulate the Lord Mayor on his employer pension pledge…

I am delighted to see businesses such as Tesco, First Group and Octopus making this commitment…

…and I look forward to seeing more companies joining up.

International

The UK economy is enhanced by its outward-facing approach…

…and this year we have built on that with our new trade deals:             

A trade deal with the United States, where we were the first country to sign a deal so that British businesses are better protected against tariffs, and where we have worked with our G7 colleagues to avert new taxes.

I'm pleased to welcome US Securities and Exchange Commissioner Hester Peirce here tonight...

…who is driving forward proposals for greater digital collaboration between our financial centres.

A trade deal with the European Union, where our strategic partnership will slash red tape and reduce costs for business…

…as well as providing a platform to further deepen our relationship in future.

And I am pleased to welcome the European Union's Financial Services Commissioner Maria Luis Albuquerque, who I met with earlier today to discuss our continued cooperation on financial services.

And a trade deal with India, with whom our recent FTA agreement will give us the best trading relationship of any country in the world.

And we have concluded the first Economic and Financial Dialogue with China in six years

and are implementing the Berne Financial Services Agreement with Switzerland.

***

At the G20 in South Africa later this week I will continue the call I made at the IMF Spring meetings –

…for countries to come together to tackle trade imbalances and drive growth…

…underpinned by stronger multilateral institutions.

I look forward to hearing more on this from the Governor in his address…

…and I would like to congratulate him on his recent appointment as Chair of the Financial Stability Board…

…a testament to both his and the UK's ongoing commitment to international standards.

Reform and industrial strategy

Britain is open for business;

Open for trade;

Open for investment.

And that's why we must be willing to change how we do things to stay competitive in that global economy.

We have ripped up the planning rules;

We have set out sweeping regulatory reforms;

We have published our industrial strategy;

And today I am announcing the Financial Services Growth and Competitiveness Strategy…

…including my Leeds Reforms…

…named after one of the UK's great hubs for financial services…

…and the city I have been proud to represent as a Member of Parliament for fifteen years.

These are the most wide-ranging package of reforms to financial services regulation in more than a decade.

***

At Mansion House last year, I said we must regulate for growth and not just for risk…

…and we are delivering on that commitment...

…while continuing to protect financial stability…

…so that the benefits of a thriving and growing financial services sector can be realised for people all over Britain.

**

Let me set out the details of that package in four parts:

First, I am rolling back regulation that has gone too far in seeking to eliminate risk;

Second, I am delivering targeted changes in the areas where the UK already has particular strengths;

Third, I am making changes to capital requirements to unlock more productive capital;

And fourth, I am introducing measures to boost retail investment so that more savers can reap the benefits of UK economic success.

Part 1: Major reforms

I will begin with the biggest reforms.

As I promised last year, I am delivering the most significant reform to the Financial Ombudsman Service since its inception…

…including proposing an absolute limit of ten years for claims.

This will speed up the time it takes for consumers to get redress for their complaints…

… returning it to its original purpose as a simple, impartial arbitration service…

…and ensuring that it no longer acts as a quasi-regulator.

And I welcome the announcement made today that the Financial Ombudsman Service will reduce the interest rate it applies before a decision from 8% to base rate plus 1%.

I am introducing new targets for the FCA and PRA to cut times for authorisations and approvals…

…and I have tasked the FCA with assessing the impact of the consumer duty and whether it unduly effects wholesale activity…

…to ensure that regulators are really regulating for growth.

And I am streamlining the Senior Managers and Certification Regime…

…reducing the burdens it imposes on firms by 50%...

…and slashing approval timelines…

…so you can bring in talent more quickly.

Part 2: Targeted Reforms

My next set of reforms provide targeted regulatory support to the areas where the UK already has a comparative advantage.

For insurance – where Britain is the destination of choice for underwriting complex, specialised and high-value risk…

…I am introducing a new competitive framework for captive insurance.

For asset management – where the UK is the world's second largest centre…

…I am futureproofing the regulatory regime and will publish draft legislation in early 2026.

For sustainable finance, I am determined to focus our efforts on policies that matter most to our world-leading sector and support investment in the transition...

...so, after consultation and consideration, I have decided not to pursue a green taxonomy…

…but instead work with regulators through the Transition Finance Council to capitalise on the £200 billion opportunity of the global transition to net zero.

And for Fintech – where almost half of Europe's Fintech's are already based in the UK…

…the PRA and FCA are launching a scale-up unit to support innovative firms to grow in the UK, including in our world-leading payments sector.

***

And I will drive forward developments in blockchain technology…

…including tokenised securities and stablecoins...

…and an ambitious design for the new digital gilt instrument…

…so that UK financial services can be at the forefront of digital asset innovation.

And because I believe the UK is the best place in the world for financial services…

…today I announced the Office for Investment's new concierge service.

Launching by October this year, this will provide a tailored service to companies considering setting up and expanding in the UK…

…and I am grateful to Chris Hayward from the City of London Corporation, for his work to drive this forward.

Part 3: Capital requirements

Now, let me turn to the changes I am making to capital requirements…

…to allow UK banks to do more lending and release more capital for investment into our infrastructure and businesses.

First, I am supporting the Bank of England's decision to raise the asset threshold for MREL requirements to between £25 and £40bn.

This will benefit the challenger banks that bring increased competition and innovation to the market…

…and support them to expand their footprint in the UK.

Second, I am confirming our approach to Basel 3.1…

…implementing lower capital requirements for domestically focussed banks from January 2027…

…while preserving flexibility on our approach for international banks to ensure the UK remains competitive while aligned with international standards.

Third, I have committed to meaningful reform of the UK's ringfencing regime…

…recognising that now is the time to go further in tackling inefficiency and boosting growth…

…while retaining the aspects of the regime that support financial stability and protect consumer deposits.

And fourth, following the new, growth focussed remit letter I sent in November…

…I welcome the Financial Policy Committee's announcement that it will review the overall level of bank capital needed for UK financial stability…

…reporting back by the end of this year.

The review will inform the work the Treasury is taking forward with the Bank of England…

…to ensure the prudential framework strikes the optimal balance to deliver resilience, growth and competitiveness.

And I welcome the recent changes the Financial Policy Committee has announced to the loan-to-income limit on mortgage lending…

…which the PRA and FCA are implementing immediately…

…that means tens of thousands more people buying their first home will be able to get a mortgage over the next year…

…with Nationwide already offering its ‘Helping Hand' mortgage to more first time-buyers…

…supporting an additional 10,000 each year.

And my thanks to Dame Debbie Crosbie for her leadership.

Part 4: Retail investment

My final set of reforms are focussed on boosting savings investment.

I recognise the potential for ISA reform to improve returns for savers…

…and access to capital for UK businesses.

I have confirmed that Long-Term Asset Funds can be included in stocks and shares ISAs…

…allowing long-term ISA investors to benefit from this innovative product.

And I will continue to consider further changes to ISAs…

…engaging widely over the coming months...

…and recognising that despite the differing views on the right approach…

...we are united in wanting better outcomes for both savers and for the UK economy.

***

For too long, we have presented investment in too negative a light…

…quick to warn people of the risks, without giving proper weight to the benefits…

…and our tangled system of financial advice and guidance…

…has meant that people cannot get the right support to make decisions for themselves. 

***

That is why we are working with the FCA to introduce a brand-new type of targeted support for consumers ahead of the new financial year.

And I also welcome the campaign to promote the benefits of retail investment which will launch next April…

…and the action to look at our current approach to risk warnings which will report back by January…

…and I'm grateful to Chris Cummings of the Investment Association for spearheading both of those initiatives.

Conclusion

Today, I have placed financial services at the heart of the government's growth mission…

…recognising that Britain cannot succeed and meet its growth ambitions…

…without a financial services sector that is fighting fit and thriving.

The reforms I have set out are the next chapter in how I intend to support this growth…

…and I thank Gwyneth Nurse and her excellent Treasury team for all of their hard work on this package.

I am also pleased to have been able to work in lockstep with our regulators…

…and I want to extend my thanks to Nikhil Rathi and Sam Woods for their innovation and the work they have done in response to my updated remit letters last year.

***

SECTION WITH 6PM EMBARGO STARTS:

We have been bold in regulating for growth in financial services…

…and I have been clear on the benefits that that will drive…

…with a ripple effect across all sectors of our economy…

…putting pounds in the pockets of working people.

through better deals on their mortgages,

better returns on their savings

more jobs paying good wages across our country

***

As I look ahead…

…it is clear that we must do more.

In too many areas, regulation still acts as a boot on the neck of businesses…

…choking off the enterprise and innovation that is the lifeblood of growth.

Regulators in other sectors must take up the call I make this evening…

…not to bend to the temptation of excessive caution…

…but to boldly regulate for growth…

…in the service of prosperity across our country.

SECTION WITH 6PM EMBARGO ENDS

***

I'm proud of how far we have come in a year of government.

I know that the changes we have made will transform our economy and our country.

And I know that you will waste no time in seizing the opportunities that lie ahead:

To build a stronger economy;

To deliver the renewal of Britain;

To make working people in all parts of our country better off.

Thank you.