Future of Financial Services

Neil O'Brien Excerpts

Monday 9th November 2020 Commons Chamber

[Rishi Sunak]

Obviously the Welsh Government will make their own decisions on supporting their own local economy. The issuance of sovereign bonds is obviously a reserved capability and it is appropriate that it remains that way.

[Neil O’Brien (Harborough) (Con)]

Short-termism in financing public companies has long been a concern in the UK, so I welcome the measures my right hon. Friend is taking today, which build on the work of the patient capital taskforce. I welcome the review of Solvency II, which is potentially deterring long-term investment, and I welcome the long-term asset fund, too. Will my right hon. Friend set out what he hopes it will achieve and what metrics he will use to assess whether it is working or not?

[Rishi Sunak]

My hon. Friend is absolutely right. To give him a sense of what we are trying to achieve, we know that today defined-contribution pension schemes in particular are not particularly well invested in long-term illiquid instruments—roughly 1% of their portfolios compared with about 10% for defined benefit schemes. If we can unlock that difference it is worth tens and tens of billions of pounds of extra investment in long-term infrastructure and assets in this country. I think that is a valuable prize and we will make a start on making that a reality next year.