GovWire

Good morning and thanks for the invitation. Its so lovely to be here today, and its one of my first addresses in my new role as City minister.

And its a very deliberate decision that Ive taken, because growth is the defining mission of this government, which youve probably heard us say over and over again. From the top down to the centre out, we recognise the importance of capital markets to delivering this growth mission that weve consistently talked about for the last few years. And As the Chancellor herself said many of you will have heard at Barclays CEO forum recently when the City succeeds, Britain succeeds. Nothing demonstrates that better than our capital markets.

Its not just that when our markets do well, our economy does well. Already this year, more than 20 billion worth of equity capital has been raised in London alone, more than three times what has been raised in the next three European exchanges combined to support businesses to invest, to innovate and to grow.

And according to a New Financial report from 2020, 90% of large UK companies regularly use capital markets, supporting some 5.5 million jobs. Its not just large companies which benefit from our markets. Over the last five years combined, more than half of all capital raised in European growth markets was raised in London. And although these facts speak for themselves, Ill spell out what they say: that UK capital markets will underpin our mission of sustained and meaningful economic growth.

But I also know that for our capital markets, stability and just the right amount of risk is the formula for economic growth. Whilst too much political change can unbalance that formula by moderating the markets ability to signal opportunities for profit and risks of loss.

So let me be clear to everyone who has raised this with me. We will not pursue change for its own sake. The economist Adam Smith once wrote about an invisible hand, a metaphor for the forces that guide decision-making in the market. Well, I want you to be in no doubt because in the marketplace of ideas, evidence will be the hand that guides our decision making in policy making generally and capital markets policy specifically. You can describe our approach to the existing program of capital markets reform with this timeless saying, which is if it aint broke, dont fix it. I hope that reassures some of the people whove raised this with me about continuity.

And while reviewing the existing plans for reform to a capital markets theres three things that I was struck by. Firstly, the proposals are technically rigorous. Secondly, they have the support of our financial services industry and its regulators. But lastly, and this is most importantly, I know they will support our mission of sustained and meaningful economic growth. And so I, and this government, will support them.

And Ill begin that support by highlighting some of the most exciting policy initiatives. Some of which Julia and I were discussing when we came in. For example, the FCAs changes to our listing rules will revolutionise our markets. By making changes to rules on dual-class share structures, related party transactions and introducing a new international secondary listing category, we will directly align our markets with leading international counterparts and provide greater flexibility to firms and founders raising capital.

The impact of some of these changes are already being felt, and Im delighted that some firms are already taking advantage of them.

The government will also continue to collaborate with a number of industry driven initiatives. Working closely with our Industry Technical group led by Andrew Douglas, and building momentum towards faster settlement of securities trades. And I look forward to the final report of the Task Force led by Sir Douglas Flint on improving the current system of share ownership and eliminating the use of paper share certificates.

And we remain fully committed, as I just said before we came on, to take forward the new Private Intermittent Securities and Capital Exchange System or PISCES a world-first bespoke regulated market for private company shares. This will help investors to invest in exciting private companies and support innovative companies to grow - and ultimately to an IPO.

To my mind, government works best when its underpinned by honest and open conversation. And thats why its very important to me to thoroughly examine the feedback from the consultation earlier this year, and to ensure that all of your opinions are properly reflected in our decision-making process.

And while its clear to me that there is huge support for the PISCES project, it is also clear that on the issues of disclosure and market abuse we need to tailor our thinking further. So please be assured that my officials and I will continue working with you. And in that spirit, my officials will be in attendance at the roundtable on PISCES later today, and Ill ensure that all the conclusions from this roundtable are considered in our final proposal to ensure that PISCES does deliver on its promise.

But I know that we can go even further to restore competitiveness to our capital markets.

And of course, a lot of you will be looking forward to the Mansion House speech and the Budget later on, which will set out the plans for our sector in more detail. But I would urge you, if you havent already, to look at the report Financing Growth that I published earlier this year which unapologetically puts really reinvigorating our capital markets at the heart of this governments growth mission. Its what we campaigned on, and its what we intend to deliver in government.

They include proposals to encourage the investment of capital freed by Solvency II reforms into UK infrastructure and green industries. To empower the British Business Bank with a more ambitious remit, for example, providing match funding to spin out seed funds. And a landmark review of the UKs pensions and retirement saving landscape to explicitly consider the role of pension funds in capital and financial markets to boost both their returns and broader economic growth.

Confirming this review was one of the first announcements made by the Chancellor, and this phase will be led by my colleague Emma Reynolds, who is the Minister for Pensions. She will be speaking here later today. And I encourage you to join this, which is the session on the UK pensions landscape, because Emma will outline the exciting plans that weve undertaken as a government.

So, I do recognise that these proposals are challenging. Im not naive about it.

But I am confident looking around this room today and seeing the expertise here, that if we work together, we will be delivering this, because sustained and meaningful economic growth is not just the governments mission, its a mission that we share with everyone in this room.

So now lets go out and deliver it.