Good evening, friends and thank you for the invitation to speak to you tonight.

My time as Shadow City Minister, and the engagement and friendship built with many of the people in this room this evening, was a brilliant personal and professional experience, and one which I believe is a perfect preparation for someone aspiring to be the UK’s Business Secretary.

At the end of last year, it was a real honour to invite my parents down from Sunderland to the Guildhall, so they could see me receive, in recognition of that work, the Freedom of the City of London.

What I want to talk to you about tonight:

Are about the crucial role financial services play in our economy;

How they form an integral part of Labour’s plans for more prosperity for all;

And about how I hope we will continue to work together, to see these ambitions realised.

That starts with acknowledging the huge challenges we face. People and businesses are facing financial pressures unlike any I have seen in my lifetime. The last decade and a half, has seen the UK underperform on growth, productivity, and wages, whether you benchmark our peers, or our own economic history.

Alongside that, we’ve also chosen to leave the Single Market – clearly a significant decision. And the transition to net zero is in itself a task of truly historic proportions. So those are three significant challenges; whoever wins the next election.

And we must rise to them, in a world where the US Inflation Reduction Act, and the subsequent EU response, has radically changed the competitiveness of alternative investment destinations;

And we must be frank, and acknowledge that Britain has paid a penalty, for having gone through 3 Prime Ministers, 4 Chancellors and 3 budgets in the last calendar year alone.

But, I am here tonight to tell you I think we can meet those challenges, that better days are ahead, that we can, and should be, optimistic. But it must start with the courage to acknowledge Britain can be better.

It won’t be done, by wishful thinking, or with a refusal to acknowledge the rest of the world is equally hungry for success.

Because for the UK to succeed, we shouldn’t seek to be a British version of Germany, anymore than the cliched view we should become a Singapore-on-Thames.

Those false prospectuses, are often based on a poor understanding of how those countries actually work. What we do need, is a better version of Britain. And that must involve a recognition, and a celebration, of the things that we do well.

I have always been proud to point out: that we are the second biggest exporter of services in the world; that financial Services are 12% of the UK’s total economic output; or that over 2 million people work in this sector – the vast majority of whom are based outside of London.

And we don’t just export services, we export standards – high quality, global standards – and I think we should be proud of that.

On a very personal level, I have always genuinely found, the City and the financial services sector, is a more meritocratic environment than either British politics or the British media.

This is a sector where I have always someone from a working class background like me can succeed and I know that is a feeling shared by my close friend and political ally, the shadow Chancellor, Rachel Reeves, who herself of course worked in this sector, both for HBOS and the Bank of England.

When we say you can trust us, with the City and this great financial sector, don’t just take us at our word, take us on who you know us to be because I have no doubt, that everything the next Labour Government wants to do will rely upon a dynamic, enterprising financial sector and that our plans represent one of the most exciting opportunities you’ll have seen for some time.

I thought at this point, that I would risk ruining this speech, by mentioning Brexit.

We get a lot of free advice in the Labour Party, by people saying to us some version of : “you are 20 points ahead in the polls, you lead on the economy, on immigration, so surely now’s the time to plunge straight back into the Brexit debate that paralysed British politics for the best part of 5 years”.

I’m not convinced.

In our view, one of the central problems that we must overcome, is the fact that the UK has the lowest rate of business investment in the G7, the kind of uncertainty that would be created by restarting the Brexit debate, would not be sensible.

But Europe is and will remain an essential market for our financial and professional services. So the next Labour government will prioritise a closer trading relationship with our neighbours.

Crucially, we will address the concerns that we have heard from countless businesses, and negotiate for the mutual recognition of professional qualifications; touring rights for our creative industries; an SPS agreement for our food producers; and access to the Horizon science programme for our brilliant universities.

But I know the City today is in a very different place to where it was six and a half years ago, when I first had to address these issues. The ship has sailed on full regulatory equivalence. It wasn’t a priority for the Government, and you have had to get on and respond to that. I do appreciate just what that has meant for many of you here tonight.

So Labour will take an intelligent approach to regularly divergence – we will not diverge for divergence’s sake; But we do recognise that outside the EU, there are opportunities available from doing things differently whether that be unlocking capital in the insurance sector for investment in infrastructure or having a more responsive regulatory regime in life sciences and biotech

And in a world of growing competition – not just in Europe but from the United States, Asia and beyond – I know how important it is to support the City to retain its competitiveness on the world stage. So I commend TheCityUK’s ambition to restore London as the world’s premier financial centre by 2026.

That is why Labour supported the Financial Services and Markets Bill and in particular, the new Secondary Objective on competitiveness.

And we’re open to working with you on a new regulatory framework –  so that British businesses can take full advantage of opportunities such as Solvency II reform or new innovations in financial technology.

We expect, and will enforce, strong consumer protections for the British people. But I think we need to consider, if the balance we have at the moment, between how we protect retail consumers, and how we regulate large, sophisticated financial institutions, is the right one.

At the moment, too many people tell me they wanted to invest in the UK, but ultimately they had to do so elsewhere. We cannot allow that to continue.

And whilst protecting the UK’s status as a global financial centre is essential. It shouldn’t be the limit of our ambitions for the sector. If Britain is to compete in an unstable world, if we are to deliver good work and living standards for all, we need a new economic approach.

Strong and inclusive economic growth cannot be achieved without active government creating the foundations for a dynamic private sector to build on. That means government taking on a more strategic role, to expand the productive capacity and the resilience of our economy.

So many business leaders, tell me they just don’t understand what the UK wants to be these days. I think if you want to be the Secretary of State for Business and Industrial Strategy – then you should have, an Industrial Strategy.

Central to that, is the need to drive investment in companies in every sector and every regionand to deliver sustainable growth and good work in the industries of the future.

Tonight I want to talk about two important components of that approach.

First, at the end of last year, we were delighted to receive the report of Labour’s start-up review, headed by Lord Jim O’Neill. Jim is a man who, like so many good things in this country, was made in Manchester.

The review was tasked with mapping out the steps to achieve one of the guiding ambitions of the next Labour government: to make Britain the best place to start and grow a business. As Business Secretary, I will do everything I can to make that ambition a reality.

I have heard time and again from business about the stubborn obstacles preventing them from scaling up, about issues with access to finance, especially patient capital.

Take our pension funds. Defined benefit funds in Britain have almost £3 trillion in assets under management. But right now, it is more often Canadian pension savers who benefit from start-ups here in Britain than savers at home.

France’s Tibi scheme has secured, more than 18 billion Euros of investment by the Government bringing institutional investors together with venture capital.

That’s the kind of initiative we want to see here.

And second – we have our Green Prosperity Plan, the very centrepiece of Labour’s economic policy

Recently, we saw the collapse of the BritishVolt gigafactory in Northumberland. This was the Government’s flagship Levelling Up project.

But even if BritishVolt was up and running, we would be significantly behind where we need to be if our automotive sector – a jewel in the crown for UK manufacturing – is really going to make the transition to electric vehicles.

We need 10 battery gigafactories by 2040. We’ve got one. Germany will soon have nearly 10 times our battery making capacity. And we’re just 7 years off the ban on new petrol and diesel engine vehicles being sold.

We need more ambition but we also need more delivery and it’s not just about financial incentives. An offshore windfarm being built today, often will have been originally licensed a decade ago and once you finally get planning permission, you might have to wait for a grid connection – right now – in the 2030s.

That’s what an Industrial Strategy should address: removing those barriers across government so business has the conditions to succeed.

Central to our plans, is an understanding, both of the urgency of our situation, and of the scale of the opportunities available to us. For you, that means making the UK investable, in a way that right now, you candidly tell us it isn’t.

To conclude, the great former Labour leader, John Smith, in the last speech he ever gave, famously said “the chance to serve, was all he asked”.

I don’t underestimate the challenges ahead but I don’t underestimate our determination to meet them

So I hope when you speak to me, or Rachel or Keir or any Labour politician, you feel the strength of our commitment to that.

The chance to work with you, on the ideas and solutions the country needs, and to serve the country by implementing them, is all I, and my colleagues seek today,

And I thank you sincerely, for your friendship, your engagement and the chance to come before you again tonight, to make that case.


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