Everything points to UK being open for business

Reliable and affordable access to capital is critical to any advanced economy. Efficient capital markets, private and public company lending are the beating heart providing the fuel to create products and services, and to grow the enterprises that provide them.

The UK is blessed with capital markets that are among the deepest, most liquid and most competitive of anywhere in the world. We are Europe’s leading hub for investment, and the second largest globally – continually powering ahead of economic behemoths such as India and China.

This achievement is built on fundamental strengths such as the rule of law, English language, a fortuitous time zone, and the fact that London is one of the world’s most diverse and liveable cities.

In 2021 alone, more than £17bn of capital was raised for firms in the UK, a 15-year high, with more than 120 deals completed – helping an abundance of companies access the finance they need to grow, boosting jobs, investment, and prosperity across the UK.

Having just returned from Germany, where I met stakeholders from across its financial services industry, it was welcome that this strength of the UK is acknowledged and relied upon by some of the world’s largest businesses – and will be crucial in funding the global transition to clean, low carbon energy.

Ultimately, different companies will have unique features and competing reasons to list in capital markets across the globe.

And in the case of Arm, while it has chosen to list in the US, it is notable that in the same breath it confirms plans to open a new innovative hub in Bristol – and has committed to further building its business in the UK, with its headquarters, operations and material intellectual property remaining here.

As City Minister, I have always been of the view that we need to go further – and not just rely on past success. I never forget that companies have a choice where to locate or to raise or invest capital.

The UK must compete for every pound, dollar or euro of that business, with the Government providing the supportive environment in which to do so.

It’s why we are giving financial regulators a new duty on international competitiveness and growth. It’s why our “Edinburgh reforms” will be simpler and more flexible than when rules were set in Brussels. And its why we are releasing capital trapped in UK banks, insurers and pension funds into more productive investments.

Our plans include reforming the UK’s prospectus regime – doing away with unnecessary bureaucracy so investors get the best possible information, more people can own public companies, and the capital raising process for businesses is simpler.

We’re also reforming the UK’s rulebook for our wholesale markets – having already removed unnecessary rules and burdensome reporting requirements – simplifying and widening retail participation in our markets while cutting costs for companies.

The UK is also seizing on new technological innovations, establishing a taskforce on faster trade settlement, completing in just a day. And we are working on plans to trial an entirely new class of wholesale markets venue: an intermittent trading venue. This market would be a world first, enabling companies to go public earlier in their growth cycle and widening the pools of capital accessible to them while democratising the chance for investors to buy into their growth even earlier.

We are also working with our regulators in delivering on these ambitions helping to make a reality of their new duty on growth and international competitiveness.

In many cases, they have acted quickly and nimbly to change their rules, offering investors and firms access to dual class shares and facilitating greater choice over potential voting rights and dividends, for example; granting permission for special purpose acquisition companies (spacs) to list on UK exchanges, encouraging greater dealmaking; and easing friction by amending the rules on free float shares.

And if we need to go further, then we will. The Financial Services and Markets Bill will complete its journey through Parliament in the coming weeks. It grants us the power to quickly and effectively repeal and replace burdensome pages of European Union laws, and establishes a broader regulatory framework that is smarter, agile, and – crucially – proportionate to the risks posed.

The Chancellor and Prime Minister are unwavering in their commitment to grow the economy and make the UK the world’s next technology superpower. We already have world-class research infrastructure and open markets to scale up the businesses of the future here in Britain – and arguably have two of the three most important artificial intelligence companies anywhere in the world.

I have immense faith in the future for the UK’s capital markets – and believe they will continue to prosper.

‘The Prime Minister and Chancellor want to make the UK the world’s next technology superpower’