Bloomberg Audio Studios, podcasts, radio news. Chancellor. Since we last spoke, Donald Trump has been re elected. Does that change your secure andomics vision, given it was at least partly inspired by Bidenomics.
Well, the idea of secure nomics is that we build a strong and secure economy on strong foundations. And that does mean thinking about where things are made and who makes them. It means being more resilient in the face of shops, whether those be energy price shocks or pandemics.
And I think those are important principles because the UK has found itself very exposed, whether it is the energy price shock after Russia's invasion of Ukraine or during the pandemic and struggling to get the supplies of vital equipment that there needed.
But would you rule out regulatory tariffs?
Well, look, I think it'd be wrong to speculate what an incoming US administration would do. But we benefit, and so does the United States, from trade worth more than three hundred billion pounds a year. That trade is growing and it's important for the prosperity of both the United Kingdom and the United States. And we'll continue to make representations for free and open trade that benefits both of our nations.
Okay, let's turn to your Mansion House speech. When it comes to harnessing pension money to boost growth. What are you going to offer in terms of reform that your conservative predecessors didn't.
Well, I've long believed that we need to reform how the UK pension system works, and I welcome what the previous government and what Jeremy Hunt did when he was Chancellor to look at the consolidation and the investment choices of pension funds. But I want to go further because there's more that we can do to unlock that long term patient capital to help British businesses like Quell where we are today in White City in London and others,
and also to help secure investment into infrastructure. If you look around the world, so countries like Canada where I was in the summer, or Australia, they have mega pension funds that achieve economies of scale, get better returns for their savers and help unlock that long term growth that we desperately need in Britain.
You mentioned Australia. Australia gives tax breaks to funds that invest in domestic companies. Where you offer the same.
We already have very generous tax breaks for investing in pensions, and rightly so, we want to incentivize people to invest and save for the future. What we don't have in the UK is mega pension funds. We don't have those economies of scale in our pension funds, which is why the interim report that we're publishing looks at having a minimum size of twenty five or fifty billion pounds, similar to what you have in Canada and the United States.
Those sorts of mega funds will have the expertise to make those investments, both in startup and scale up businesses and in British infrastructure.
At the size matters, but I'm wondering how you get that money into UK companies. Are you looking at mandatory minimums.
We're not looking at mandating pension funds. What we're looking at in these reforms, building on the reforms of the previous government, is to create a smaller number of big pension funds with the expertise and the scale to make those long term investments. Quell where we are today received money from the British Business Bank, which leverages in private sector investment, but most of the funding that this business and so many other scale up businesses in Britain have
been able to access comes from the United States. I don't want it just to be US investors benefiting from investment in UK startups and scale ups. I want savers here in Britain to be able to benefit from that growth potential that we see at this business and so many others.
Terms of there's also the issue of how you get more money into the pension parts. In the first place. Employers are already squeezed by the tax hikes in the budget. How are you going to address that.
By the end of this decade, we expect to have one point three trillion pounds in pension funds, either in DC or in the local government pension scheme. But I don't think anyone believes that money is working well enough, either for savers or indeed for our wider economy. And the reforms that we're bringing in is about ensuring that the money that is invested the assets under management work better for the UK economy and work better for savers.
I'm just wondering what's different to what Jeremy Hunt did, because he just finished this consultation into consolidating the local government pension scheme. It made these exact points. Do you really need another consultation.
The difference between what we're doing and what the previous government did is that we're going to legislate and the previous government haven't had a pensions bill, didn't have a pensions bill for around five years. We have a slot in the king Speech for a pensions bill in this session of Parliament. Will be introducing legislation in the Mark in the spring, so that we don't just talk about consolidation in the pension industry. Anyone can do that, but
we actually make sure that it happens. That's the difference between this government and the previous government. We're getting on and doing the job.
All right, what about the regulators? How are you going to make them prioritize competitiveness?
Well, I'll be publishing the remit letters to the regulators tomorrow at the met Mansion House Speech. Obviously, regulation is incredibly important both for protecting consumers but also for protecting our wider economy. But we don't just need to regulate for risk. We also need to regulate for growth. There's
huge growth potential in our financial services sector. The secondary objective that we supported in opposition is really important, but we now need to bring that to life and ensure that our regulatory system helps businesses to grow, not just manage risk.
But Chancellor, US investors tell us that all these recent regulatory reviews make investing in UK financial services less attractive. Are you planning anything to give them more certainty?
We had a very welcome response over the last few months, whether that's to our changes in ring fencing rules, our implementation of the Basel rules, or indeed the SAA's rules around listing in London. Things that we've done in our first four months of government to make Britain a more attractive place for global investors in financial services. We've brought in sixty three billion pounds worth of investment at the
International Investment Summit just a few weeks ago. So we recognize the important role that regulators have in encouraging growth in financial services, not just managing down risk.
I mean it's the motor services they're pointing to, and.
There's a court case at the moment, so it's important to let that work through the system and be up to the motor finance companies whether they appeal the court decision. It is welcome that that sector continues to offer motor finance through a number of workarounds. But it's now up to those individual companies whether they want to appeal the court decision.
All right, Chancellor, good luck with you, mana and House speech tomorrow. Thank you very much.
Thank you,