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....Sound money must come first but our ambition is to have nothing less than the most competitive tax regime of any major country.
For financial services, taking back control of our rule book from Brussels has given the UK a unique opportunity and a moment in time to do things differently: To be the world’s most innovative, open and competitive global financial centre.
Our Edinburgh reforms take that ambition forward. It is a comprehensive package touching many of you here.
Reforming bank ring fencing, holding the regulators to account for improving the speed of authorisations, reforming MiFID streamlining the senior manager regime and removing the pensions charge cap. Just some of around 30 measures to make us more competitive.
The common theme here is that this government has a philosophy of regulation which is simple and proportionate.
Having been in business and having worked in financial services I know you can’t have regulations or regulators who simply try to remove all risk.
Solvency II is a perfect example of our approach.
We worked closely with ABI members throughout, listening to the voice of practitioners.
There were plenty of naysayers and it would have been easy not to make any change.
But we are 100% committed to delivering the reform package we have announced to let you use your investment firepower to deliver as an engine for national dynamism whilst maintaining policy holder protection.
Reducing the risk margin will unlock currently unproductive capital, opening up the potential of lower product prices and higher annuity yields.
Broadening matching adjustment eligibility will make it easier to invest for the long term in projects even when there is a construction phase - whether building housing, wind farms or town centre regeneration.
Good for returns and good for society.
To be candid, this is an issue that goes far beyond this sector.
The combination of overly prudent regulation and mark to market accounting standards mean far too much UK capital is trapped in short term, low yielding investments.
The resulting ‘performance penalty’ is not serving the needs of British investors and pensioners.
It’s something that the Chancellor and I are focussed on as we look to help Britain be a start-up and scale-up superpower.
In the case of Solvency II, it was helpful that, again working with you, we were able to communicate clearly what benefits will flow...
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