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The Chancellor of the Exchequer Rt Hon Alistair Darling MP, and Economic Secretary and City Minister Kitty Ussher MP this morning hosted senior financial sector representatives at a meeting of the High-Level Group on City Competitiveness at No 11 Downing Street.
The High-Level Group met to discuss recent events in global financial markets, transport issues, and to follow up discussions from previous Group meetings on their strategy to enhance the global competitiveness of the City and the UK-based financial sector.
Also in attendence were Secretary of State for Transport, Ruth Kelly, Secretary of State for Scotland, Des Browne, and BAA Chairman Sir Nigel Rudd and CEO Stephen Nelson.
Speaking after the meeting, Alistair Darling said:
"As one of the world leaders in financial services Britain should be confident about the opportunities that come with globalisation. We must also remain vigilant about the challenges ahead. Today, we have taken further forward our discussions on what more business, the City and Government can do together to ensure London retains its pre-eminence in the sector. I want to remain in close touch with the City on these issues."
Kitty Ussher said:
"To ensure continuing success of the financial services sector we need the Government and the industry to continue to work together. Where there are problems we will work to address them. But we have also shown that the Government listens to business and finds solutions. The recent announcement on Crossrail and the progress on Islamic finance shows that working together we can make a positive impact."
The Group discussed recent market events, reiterating support for a principles-based regulatory approach focused on outcomes and good business governance. It was agreed to establish an experts group of financial sevices representatives to inform the Government's approach to international discussions affecting the financial services industry.
The Group also discussed:
Transport issues
Ruth Kelly led discussions on transport and
outlined proposals she would formally announce in Parliament today
on easing baggage restrictions (the 'one bag rule'). A
new approach to hand baggage security will be introduced
progressively as airports are ready to handle the extra capacity,
delivering a better service to passengers. The Group agreed that
it would be helpful to establish a forum to monitor progress on
improving passenger movement at Heathrow.
Islamic Finance - Sukuk Issuance
Kitty Ussher announced the
launch of the consultation on the potential for the Government to
become an issuer of wholesale sterling denominated Sharia'a-
compliant investment certificates or 'sukuk'.
Carbon Markets Roundtable
Following the Government's
call last month for London to aspire to be the global centre for
carbon trading, the Group was told that the Exchequer Secretary
Angela Eagle would today announce the establishment of a carbon
markets expert group to discuss ways of enhancing and developing
the global carbon market and to act as a forum for channelling
industry views to the Treasury.
Lamfalussy Arrangements
Following the publication of a
discussion paper on the review of the Lamfalussy Arrangements for
EU financial services supervision, the UK's position was
outlined. This rejects a one-size-fits-all regulatory approach or
a pan-European regulator, as neither would allow the flexibility
needed for EU markets to prosper.
The Group were also updated on progress on a number of workstreams relevant to the City competitiveness agenda including:
International Centre for Financial Regulation (ICFR)
Chairman
Mervyn Davies and the Interim Executive Committee are now
preparing the London-based ICFR for launch, with work underway to
agree legal status and governance. Further progress will be
reported on in early 2008.
Insurance
An Insurance Summit was held last week at the
Treasury to assess progress on industry initiatives to modernise
the London wholesale insurance market and to report back on
Treasury's review of the business environment for wholesale
general insurance.
Fund Management competitiveness
The Government intends to
implement proposals allowing paperless transfer and settlement for
investment funds, which could save the industry up to £290m a year.
Promoting financial services and financial dialogue
overseas
UK Trade & Investment (UKTI) rollout of the new
overseas promotion strategy for UK-based financial services
continues. Relationships with key international partners were
further strengthened by a UK-India Economic and Financial Dialogue
held in September, discussing financial sector development and
reforms, including liberalisation.
Wholesale financial sector skills
The group looking at the
wholesale financial sector skills gap is focusing future work on
three key areas - clearer articulation of employers' skills
requirements; improved links between employers, Higher Education
Institutions and professional bodies; and better marketing of
careers in the wholesale sector.
Financial Crime
The UK currently holds the Presidency of the
Financial Action Task Force (FATF). The Group was provided an
update on the first FATF Plenary meeting of the UK Presidency in
October 2007, at which new steps were agreed to strengthen private
sector engagement in the global fight against money laundering and
terrorist financing. It is hoped that a new partnership between
the FATF and the private sector can lead to a better focus on
cost-effective and efficient approaches for combating money
laundering and terrorist financing threats.
- In Budget 2006 the-then Chancellor Gordon Brown announced a commitment to work with the financial sector to establish a High-Level Group of senior representatives from across the financial sector, to develop and support a new strategy to promote London as the leading international financial centre. The High-Level Group has met twice previously: on 18 October 2006 and 9 May 2007.
- At the High-Level Group Kitty Ussher announced her intention to hold an informal High-Level Group meeting next year with Members of Parliament to discuss the UK's principles-based regulatory approach.
- The joint Treasury - Debt Management Office consultation document on sukuk issuance, launched today, seeks views on the advantages, disadvantages and risks of the Government becoming an issuer of Islamic financial instruments and on a number of specific and technical areas relating to any issuance. Sukuk issuance would further build on the City's reputation and establish London as a world centre for Islamic finance. The consultation document is available from: http://www.hm-treasury.gov.uk/consultations_and_leg islation/sukuk_issuance/consult_sukuk_issuance.cfm
- Exchequer Secretary Angela Eagle will announce the
establishment of a carbon markets expert group to discuss ways of
enhancing and developing the global carbon market and to act as an
industry liaison for the Treasury at the carbon markets conference
today.
See: http://www.hm-treasury.gov.uk/newsroom_and_speeches/press/2007/press_124_ 07.cfm . - The Government's approach to the review of the Lamfalussy
arrangements for EU financial services supervision is outlined in
the joint Treasury-FSA publication Strengthening the EU regulatory
and supervisory framework: a practical approach is available from:
http://www.hm-treasury.gov.uk/documents/financial_ser vices/eu_financial_services/fin_eufs_index.cfm. - Increasing Fund Management competitiveness by allowing
paperless transfer and settlement for investment funds was
announced last month. See: http://www.hm-treasury.gov.uk/newsroom_and_speeches/sp
eeches/econsecspeeches/speech_est_171007.cfm.
The Government will also act to remove legislative barriers to the trading of investment fund units on CREST and any other relevant systems, allowing brokers and fund managers to choose the solution best suited to their business. - Roll-out by UKTI of the new overseas promotion strategy for UK-based financial services continues apace, with significant progress achieved to date. The next Ministerial round of the UK-India Economic and Financial Dialogue will be held in London in mid-2008. Work is underway to prepare for the 7th UK-China Dialogue, to be held at Ministerial level in Beijing in early 2008. UKTI has produced tailored strategies for overseas promotion of the Uk-based financial sector in key overseas markets including China and India, with work progressing well on strategies for the Middle East and Russia. Additional diplomatic staff dedicated to financial services promotion are now based in Shanghai, Beijing and Mumbai.
