UK Financial Services

Debate between Peter Fortune and Callum Anderson

Tuesday 1st September 2026 Westminster Hall

[Callum Anderson (Buckingham and Bletchley) (Lab)]

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 interest in the UK or a City of London story alone. They are a genuine national endeavour. When I meet in Parliament the people I represent from Buckingham and Bletchley—from the owners of small businesses to the families who I also meet on the doorstep and the staff at Allica Bank or Santander UK, both of which have their headquarters in Milton Keynes while serving customers the length and breadth of Britain—I see the same thing: a national industry built for all of us. In the time available, I will set out five challenges and opportunities facing the sector in the years ahead.

First, there is the need to go even further in mobilising a greater share of domestic capital toward domestic assets, in particular high-growth businesses and especially those aligned with the eight sectors set out in the industrial strategy and infrastructure development. I welcome the Mansion House speech in July by the former Chancellor, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), and the progress that this Government have made against the financial services growth and competitiveness strategy one year after its publication, building on the progress made by the previous Government. We have seen that £28 billion of equity capital has been raised in London since the start of last year. The Pension Schemes Act 2026 was also passed in the last parliamentary Session, which is expected to deliver an additional £29,000 in pension savings over an average career. Eight firms have now been authorised to provide targeted support to savers, benefiting around 18 million consumers—our constituents—over the coming decade. All of that is welcome progress in turning the overly cautious British saver into the responsible investor, but I believe that we can—indeed, must—go even further in unlocking our largest pools of pension, insurance and retail capital.

When we were debating the Pension Schemes Act earlier this year, the case against mandating UK investment rested on two grounds: first, the principle that Government should not tell institutions or individuals where and how to invest; and, secondly, that if UK investments were good enough, funds would already be backing them. However, what I think that argument missed is the trend towards passive global indexing that we have seen over the last few decades, which has mechanically reduced UK equity allocations to around 4%, regardless of the underlying fundamentals. I suspect that without further intervention, that trend will increase, leading to further declines in the years ahead. That risks creating a self-reinforcing cycle of declining investment in British companies by funds, regardless of where they are domiciled, depriving UK plc of domestic patient capital, and it would ultimately weaken our public equity markets and the strength of the London stock exchange.

In the light of that, I encourage the Government to look again at how they can actively incentivise our largest pools of domestic capital. For instance, we could build on the Pension Schemes Act by requiring default pension funds to adopt a UK-weighted approach to listed equity, with UK equities making up, say, 20% to 25% of listed holdings in order for them to continue enjoying the various tax reliefs on offer, but giving funds and individual savers full agency to opt out. According to the New Financial think-tank, that could unlock as much as £75 billion of additional investment into UK companies. I am aware that this idea is held by a number of right hon. and hon. Members in this House, as well as Members of the House of Lords.

We could also scale up the British Business Bank’s British growth partnership so that it is more in line with the scale of France’s Tibi initiative, while giving the British Business Bank and the National Wealth Fund complementary mandates to crowd in capital for the larger funding rounds. We could support UK scale-ups—which my right hon. Friend the Prime Minister just mentioned in his statement in the main Chamber—with the British Business Bank focusing on those companies from series B to C, and the National Wealth Fund acting as a direct investor in later-stage companies.

Finally, we should maintain our focus on unlocking some proportion of the £600 billion of retail capital currently held in cash, in individual savings accounts or other savings accounts. With the right mix of financial education, a simpler ISA product framework, tax incentives and, crucially, accessible investment research, we can ease access to capital from growing domestic companies while enabling British people to own a greater share of our economy’s future success.

[Peter Fortune (Bromley and Biggin Hill) (Con)]

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?