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UK Financial Services — [Derek Twigg in the Chair]
01 September 2026
Lead MP
Callum Anderson
Responding Minister
Lucy Rigby
Tags
EconomyBusiness & Trade
Word Count: 13267
Other Contributors: 9
At a Glance
Callum Anderson raised concerns about uk financial services — [derek twigg in the chair] in Westminster Hall. A government minister responded.
Key Requests to Government:
Anderson encourages the Government to look again at incentivising the largest pools of domestic capital, such as pension funds and insurance, to invest more in UK companies. He also calls for the Government to establish a long-term retail investment strategy, publish a clear road map for DLT-enabled capital markets, and maintain the urgent momentum on implementing the financial services AI adoption plan. Additionally, Anderson suggests doubling the size of the co-operative and mutual sector and preparing clear, measurable performance indicators for the financial inclusion strategy. Hunt urged the government to do no harm to the financial sector with additional taxes, to make regulation more proportionate, to encourage more saving, and to keep Britain open to the world. He requested the Economic Secretary to the Treasury to address measures for the Budget, undertake a review of international tax competitiveness, and outline steps the FCA and PRA can take to deliver their competitiveness and growth objectives.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
Callum Anderson is concerned about the need to mobilise more domestic capital towards domestic assets, especially for high-growth businesses and those aligned with the industrial strategy. He highlighted the trend of passive global indexing that has reduced UK equity allocations to around 4%, which could further decline without intervention, leading to a self-reinforcing cycle of declining investment in British companies. Anderson also discussed the challenges of managing AI and digital revolution in financial services, the clean energy transition, financial inclusion, and skills gaps in the sector. He emphasized the importance of policy certainty and the need for the Government to work with industry to provide a supportive regulatory framework and innovative spirit to strengthen the UK's financial services sector. Jeremy Hunt expressed concern about the negative impact of the financial crisis on the UK economy, noting that the government had to support the sector with £1 trillion. He highlighted the sector's current strengths, including employing 2.5 million people and generating over £110 billion in tax revenues. Hunt also raised the issue of high bank taxes compared to international competitors, which could potentially damage the sector's competitiveness.
He noted the similarities between his constituency and the speaker's, mentioning the takeover by Nationwide of Virgin Money and its impact on extending financial services, stressing the role of mutual sector institutions in widening prosperity.
Bobby Dean expressed concern about the UK's pension fund allocation falling to 4%, well below the global average of 13%. He argued that a lack of state intervention has led to an economy dominated by a few powerful actors, exemplified by pension funds investing more in Apple than in the entire UK economy. Dean suggested the need for a more hands-on approach to incentivise and support UK business growth, including redesigning the pension fund system to actively manage funds and identify regional investment opportunities. He proposed right-sizing pension funds to ensure they do not find UK opportunities too small to manage while avoiding excessive passivity. The description of the regulatory regime since 2008 is fair. There has been a degree of over-correction, particularly on things such as capital requirements, and the regulators themselves are saying that we could do with some tidying up, but abolishing the ringfencing regime—one of the fundamental protections put in place for everyday bank users in relation to the risks presented by investment banking—does not seem like addressing an over-correction. It seems like a revolution back to the 2008 regulatory regime.
Charlie Maynard
Con
Brentford and Isleworth
Charlie Maynard highlighted the strategic importance of the UK's financial services sector, emphasizing the need to address challenges posed by Brexit and to pursue a growth and defence partnership with Europe, including joining the single market and customs union to secure passporting rights. He called for quicker financial services cooperation with Europe, better use of the UK-EU financial regulatory forum, and implementation of the UK-EU youth mobility scheme. Maynard also stressed the importance of fair regulation, efficient competition enforcement, and innovation support, suggesting reforms to R&D tax reliefs and reduced regulatory burdens for venture capital. He raised concerns about AI security and the need for the Government to promote safe AI deployment and strengthen cyber-security. He also questioned the Government's stance on stablecoins and a digital pound, urging for more clarity and a timeline for decision-making.
Chris Philp
Con
Croydon South
Chris Philp agrees with Anderson's view on retail capital and the importance of policy certainty in the clean energy transition. He highlights the Government's commitment to doubling the size of the co-operative and mutual sector and encourages them to go further by setting clear performance indicators for the financial inclusion strategy.
Jim Shannon
DUP
Strangford
Jim Shannon emphasised the importance of financial services stability and integrity for all households, focusing on the challenges faced by ordinary families due to bank branch closures and the need for regulatory fairness for small businesses. He highlighted the duty to protect physical access to cash, support consumer needs, and ensure transparency in financial institutions.
Kerry McCarthy
Lab
Bristol East
She agreed with her hon. Friend's point, highlighting the importance of government signals to support businesses that are innovating towards net zero goals. Kerry McCarthy, who worked in the financial markets for 21 years, highlighted her involvement in the salvage operation of Barings bank and expressed concern about the balance between stringent regulation and light-touch regulation to prevent another bank collapse.
Mark Garnier
Con
Wyre Forest
Mark Garnier highlighted the lack of growth capital in UK financial services and the undervaluation of the UK stock market, noting the need for investment in clean energy. He discussed the regulatory environment, mentioning the cost of compliance as £33.9 billion annually and the impact of over-regulation on lending and international reputation. Garnier supported reducing regulatory burdens and proposed removing bank ringfencing, reducing capital requirements, and replacing the Financial Ombudsman Service.
He questioned the Treasury's assessment that the Financial Ombudsman Service is not fit for purpose and inquired about the feasibility of establishing an independent body to replace it, suggesting it could increase legal certainty and encourage investment.
Phil Brickell
Lab
Wellingborough
Phil Brickell highlighted the importance of clean financial services, emphasizing the need for smarter regulation that prevents bad faith actors and maintains economic integrity. He advocated for better regulatory enforcement and transparency, suggesting that the FCA should retain a greater proportion of anti-money laundering fines to strengthen enforcement capabilities. Brickell also called for an economic crime fighting fund and for the UK's overseas territories to implement public registers of beneficial ownership to reduce compliance costs and improve transparency.
Government Response
Lucy Rigby
Government Response
Lucy Rigby, Minister, emphasized the UK's financial services strategy, focusing on mobilizing domestic capital, supporting businesses through every stage of growth, and encouraging pension funds to diversify their investments. She also highlighted the importance of digital innovation, including the tokenization of financial markets and the issuance of a digital sovereign debt instrument by Q1 2027. Rigby discussed the UK's leadership in sustainable finance and the financial inclusion strategy, aiming to make financial services more accessible to all constituents.
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Assessment & feedback
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.