Latest news with #TheCityUK
BBC News
28-05-2025
- Business
- BBC News
Reeves outlines plan for £25bn pension 'megafunds'
The government has fleshed out its plans for reforming the UK pension industry, including the creation of £25bn "megafunds" which will be instructed to make a portion of their investments locally to help fuel economic chancellor said the overhaul, designed to follow the example of Australia and Canada's huge pension investment funds, would also boost people's pension pots. "These reforms mean better returns for workers and billions more invested in clean energy and high-growth businesses," Rachel Reeves of the UK's largest pension firms already approved the gist of these reforms in a voluntary agreement earlier this month. However, the government is also including a legislative back-stop, which will allow it to push through the new rules, if insufficient progress is made by the end of the government has indicated it does not expect to use the new powers. Nevertheless, that element may draw criticism, with some in the industry opposed to any government mandate over how and where investments are Alexander, a director at the Pensions and Lifetime Savings Association, said the changes would have "significant implications" for how pension schemes she added: "Increased consolidation has the potential to improve retirement outcomes through improved governance, wider investment diversification and improved bargaining power." Miles Celic chief executive of The City UK, representing the financial services industry, backed the chancellor's assertion that the move could "help drive economic growth". A former Liberal Democrat pensions minister, Sir Steve Webb, who is now a partner at consultants LCP (Lane Clark & Peacock), described the news as "truly a red letter day for pension schemes, their members and the companies who stand behind them"."The Government has clearly been bold in this area and this opens up the potential for this surplus money to be used more productively to benefit scheme members, firms and the wider economy," he added. One of Labour's first moves after taking office last year was the announcement of a pension review. In November the chancellor floated her "megafunds" plan, which covers retirement savings for the majority of UK workers in two there are the 86 different local authority pension schemes, which provide for more than six million people in their retirement, the majority low-paid women. The £392bn in these defined benefit schemes will be merged in just six asset pools by March next a defined benefit scheme a worker pays into their pension and is paid a pre-determined amount based on their salary and length of investment targets will be agreed for local authority pension schemes for the first time, the Treasury defined contribution schemes currently worth £800bn, and covering millions of other private and public sector workers across the country, will also be defined contribution schemes workers are not guaranteed a specific amount. Instead their pension depends on the performance of the fund in the years before 2030 the government says there should be more than 20 pension funds worth more than £25bn, in contrast to the current part of the voluntary agreement, known as the Mansion House accord, agreed earlier in May, the 17 firms involved committed to investing 10% of their assets in things other than publicly traded shares, so that more money would flow into home-building, infrastructure projects and start-up businesses in fast-growing addition, 5% of investments will be earmarked to go into UK reforms will form part of the Pension Schemes Bill, about to go before Parliament. The new approach would mean over £50bn additional investment in UK infrastructure, new homes and businesses, the Treasury Thursday the government is publishing the final report from its Pensions Investment Review. It said the review found the reforms would drive higher returns for pension savers through cutting waste, economies of scale and improved investment a result workers on average earnings could see a £6,000 boost to their defined contribution pension pot, the Treasury said.
Daily Mail
27-05-2025
- Business
- Daily Mail
Give us state-backed loans to lift growth: Frustrated UK defence sector demands government help to secure financing
The defence industry has called for a state-backed loan scheme worth hundreds of millions of pounds to help 'frustrated' firms secure financing. Arms companies, particularly smaller ones in the supply chain, have been blocked from opening bank accounts, getting insurance and borrowing money, a report by trade groups ADS and TheCityUK said. And the Government does not provide enough protection to banks who work with defence companies in the face of protests and vandalism, they added. It comes amid a major drive to boost the UK's military capabilities against a backdrop of escalating global conflicts. European defence spending became a top priority after Donald Trump earlier this year said the US would no longer fund Ukraine in its war with Russia. A reset in UK-EU relations could pave the way for Britain to access a £125billion European defence fund. Plea: Smaller defence firms in the supply chain have been blocked from opening bank accounts, getting insurance and borrowing money, an industry report stated TheCityUK, a lobby group for the financial services industry, and defence firms trade group ADS yesterday published a policy paper aimed at improving finance and investment access for the sector. A so-called Guarantee Scheme for Defence would see the Government underwrite loans for the smaller firms that supply giants such as BAE Systems and Rolls-Royce. The state backing would help boost the confidence of banks lending to the sector, the policy paper said. The scheme, which could be funded by the National Wealth Fund, was estimated to be worth hundreds of millions of pounds depending on demand. The report said: 'Recent increased interest in investing in defence companies is welcome, but this increased appetite needs to flow through to the supply chain in the form of greater cashflow and investment opportunities.' Ministers were also urged to provide more support for banks and other financial service providers operating in the industry following protests and vandalism by anti-war campaigners. For example, Barclays branches have been targeted by activists opposed to its alleged provision of financial services to Israeli defence firms. The lender's annual general meeting in London earlier this month was disrupted by pro-Palestinian activists chanting the slogan 'stop funding genocide'. The report said: 'Despite its support for UK defence businesses, the financial and related professional services industry does not always feel it has sufficient political 'air cover' from government. 'For example, bank branches have been repeatedly targeted and damaged by anti-defence protesters.' TheCityUK chief executive Miles Celic said: 'The UK's defence and security businesses face a number of challenges that don't arise in other areas of public-private partnership. 'There is now both an opportunity and pressing need to maximise the contribution of private finance and investment to support UK defence and security businesses. 'Our industry is committed to working together with the defence industry, government and regulators to develop mechanisms that can help de-risk the industry for the finance and investment community.' ADS boss Kevin Craven also said: 'Financing challenges for SMEs and scale-ups in the defence sector need addressing to ensure cashflow, investment opportunities and resilience, which is essential for innovation and economic spillovers. 'It's clear that businesses in both the defence and financial services have similar frustrations with existing conditions.'
Yahoo
07-05-2025
- Business
- Yahoo
Trump's latest tariff onslaught threatens to hit Britain where it hurts
Hollywood actor Jon Voight is most familiar as the star of gruesome horror flick Deliverance, the villain in Mission: Impossible, and as Angelina Jolie's father. But the veteran star's new role threatens to have a much greater global impact than any of his turns on the silver screen. That's because in an unlikely twist, the actor has been asked by the US president to work out how to save Hollywood's ailing film industry – and in doing so appears to have moved the White House on to a new front in its trade war against services imports which threatens to imperil Britain. Services exports, which include films, are far more important for Britain's economy than the sale of tangible, manufactured products – which Trump has already targeted with his 'liberation day' tariffs. The UK sent £59.3bn of tangible goods such as cars, medicines and aircraft across the Atlantic last year. But that was dwarfed by the £137bn of services sold into America, led by business services such as consultancy, as well as finance, pensions, insurance, telecoms and travel. 'Just the notion of tariffs being extended to services has the potential to cause more economic damage simply through the uncertainty it generates,' said Chris Williamson, chief business economist at S&P Global. The UK's services prowess may become a lightning rod for Trump's ongoing campaign against trade imbalances. While imports and exports of goods between Britain and the US are relatively balanced, the situation is very different for services. British sales to the US exceed trade in the other direction by a margin of £75.8bn – a gap which risks incurring Trump's wrath if he starts to view the one-sided balance of trade as a problem. Any threat to those sales would be extremely serious, especially for Britain's financial services and legal profession which helps drive the economy. Miles Celic, chief executive of industry group TheCityUK, said: 'The relationship between the UK and the US in financial services and investment is the closest of its kind anywhere in the world – we are each other's largest investors. 'British firms have huge footprints in the US in financial services ... American financial services and professional services firms are a huge engine of growth for financial services here in the UK. 'The nature of trade in services is that tariffs are less of an issue. It is not completely irrelevant, because tariffs have an impact on clients for financial services firms. 'But the concern for financial and other forms of services is always around regulatory barriers – the role of regulation in the movement of people and capital, and minimising friction between each others' markets.' Traditionally, tariffs have only been charged on goods: they need to be brought into a country via a port of entry, which makes them easy places for the authorities to police movements and levy taxes. But services are rather more complicated. In the case of a film – or a wider range of other services like an architect's blueprints, an insurance contract or a workplace training session – the transfer across borders can happen via an upload to a website or an attachment to an email, or even a phone conversation. None of those 'imports' into the US are easily observable by the taxman. Ingo Borchert, professor of economics at the University of Sussex Business School and deputy director of the UK Trade Policy Observatory, says taxing a cross-border digital transfer would pose challenges. 'It is pretty hard to see how that would even be feasible – we don't get to observe this,' he says. 'A services transaction is, for tax purposes, a business transaction, and is subject to VAT. So it is perhaps not inconceivable to imagine that the US might require its companies to reveal whether purchases have been made from abroad or not.' When it comes to a cinema, a film made abroad could incur a surcharge. But the source of a product made with input from around the world is not always obvious. 'To what extent that entails incentives for truthful reporting, obviously I would not know,' says Borchert. 'But that is the only way to do it – you do not see the service travelling across the border.' Alternatively, visas could be made more expensive for business travellers visiting the US to work, for example, as a consultant for an American business. It would be possible to impose stricter conditions on foreign businesses setting up operations in the US – though that would not match Trump's goal to drag more businesses and jobs into America. Yet the Trump administration is far from the first to consider limits on services trade. Foreign companies face a host of difficulties operating in countries including China, for instance, while the EU has powers to retaliate with its own restrictions on services. Allie Renison, from SEC Newgate, explains that any US tariffs or limits on services trade could lead to a new tit-for-tat escalation. 'The EU has its Anti-Coercion Instrument, the nuclear option for extending retaliatory measures to services. So far the EU has held off doing that, but I think if the US really went ahead with this, the EU would probably be minded to drop that into retaliation,' she says. That could cover anything from cutting American businesses out of public sector contracts, to restricting licences to operate in the EU or the mutual recognition of qualifications which allows Americans to work in regulated industries on the Continent, to taxing royalty payments earned by US intellectual property in Europe. As things stand, services exports are already in trouble anyway. New export orders fell last month more steeply than at any point since 2021, according to S&P Global's PMI survey of services businesses. While that partly reflects a slump in demand as the trade war slows the global economy, it also includes services which are embedded in goods – the insurance and trade finance which is bought as products are shipped, or the servicing contracts which go alongside the sales of jet engines. 'A lot of services are closely correlated with goods production and exports – logistics, packaging. Those will struggle. But there is a broader downturn in global business and consumer confidence, so companies are pulling back on investment and expansion plans,' says Williamson at S&P. Every building project cancelled means less work for consultants, architects and accountants, he says, while putting other plans on hold means less need for finance, even without direct tariffs on services trade. But the threat alone has echoes of an old fashioned Hollywood disaster movie. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Reuters
05-03-2025
- Business
- Reuters
UK finance, defence trade bodies explore funding blueprint for arms race
Summary Companies Lobby groups outline potential solutions to financing snags UK government pledges to up defence spending to 2.5% of GDP Defence shares have been rising, lenders face compliance burden LONDON, March 5 (Reuters) - Top trade bodies for Britain's financial services and defence industries met on Wednesday to craft a wishlist of policy reforms they say could drive more debt finance and equity capital towards Britain's defence sector, sources said. TheCityUK, UK Finance and defence industry peer ADS Group convened as European governments unveil rearmament plans driven by Russia's war in Ukraine and fears that Europe can no longer be sure of U.S. protection. British Prime Minister Keir Starmer pledged last week to increase annual defence spending from 2.3% to 2.5% of GDP by 2027 and to target 3% - a level last seen just after the Cold War. On Tuesday, German lawmakers proposed a landmark overhaul of borrowing rules to fund its military and the European Commission said it could borrow up to 150 billion euros to lend to EU governments eyeing similar goals. TheCityUK and UK Finance between them represent some of Britain's largest finance firms, including HSBC (HSBA.L), opens new tab, Barclays (BARC.L), opens new tab and Legal & General (LGEN.L), opens new tab. ADS's membership includes defence giant BAE Systems (BAES.L), opens new tab. Together the trade bodies agreed to make a coordinated push to tackle some of the "friction points" that govern how banks and investment firms can support arms manufacturers. The joint recommendations, to be submitted to Britain's business minister Jonathan Reynolds, will include policies to reduce lending risk via improved sharing of information, faster payments to small companies in defence supply chains and clearer regulatory signals that defence investment is compatible with ESG mandates. "In our view, there's no silver bullet here because of the complexity of the regulatory landscape," David Raw, managing director, commercial finance, at UK Finance told Reuters. A December 2023 paper, opens new tab published by UK Finance and ADS identified 10 international frameworks and agreements that had a bearing on the supply of financing to businesses in the defence and security industry. "The one thing the government can definitely do is speak up more vociferously for banks who are lending to the defence sector because this can, reputationally, put some in a difficult position," Raw said. Activists have targeted numerous branches of Barclays (BARC.L), opens new tab in recent months in protest against the lender's provision of financial services to companies that produce equipment used by the Israeli Defence Forces. WHO PAYS? U.S. President Donald Trump has suspended United States military aid to Ukraine in its fight against Russia, and has demanded European countries pay much more to protect their borders. Trump has called on NATO members to spend 5% of GDP on defence, more than double the organisation's 2% guidelines. European Commission President Ursula von der Leyen warned that Europe was now living in "an era of rearmament". Lenders and investors are exploring how they can help bankroll the effort without breaching international rules or sparking ire among customers opposed to warfare or weapons manufacturing on ethical grounds. Britain has tried to encourage private investment in defence companies, including funds with sustainable criteria. European money managers have been steadily adding aerospace and defence stocks to such funds, with the weighting up to 0.5% from 0.3% in two years, Morningstar data shows. European defence company stocks have soared in the last few weeks and rose again on Wednesday as investors bet on their growing order books.
The Independent
28-01-2025
- Business
- The Independent
‘I have never worked for the Chinese government'
A Treasury minister has insisted she never worked for the Chinese government or businesses, after concerns about her career as a lobbyist were raised. Emma Reynolds said 'a lot of rubbish' has been written about her career with business lobbying group TheCityUK, where she was managing director of trade until May. Downing Street faced questions about whether the City minister would recuse herself from matters involving China. Media reports have claimed that while she was at TheCityUK, Ms Reynolds was involved in a campaign to persuade the then-government not to impose tougher rules on those doing business with China. I can categorically tell you I have never worked for the Chinese government, and I've never worked for Chinese business Emma Reynolds Asked about whether she lobbied on behalf of Chinese companies, Ms Reynolds told Times Radio: 'Firstly, that is not correct. 'I represented UK-based financial services firms, and there were concerns that they had about their activities, not Chinese activity. 'Can I just correct you on that, because there's been a lot of rubbish written about this, frankly.' She added: 'This was about ensuring that UK financial services had opportunities in international markets. 'I think having that experience, working in the City for nearly five years is something that is a strength in terms of my role now as economic secretary to the Treasury, in charge of our work with financial services.' Pressed whether her role meant she had lobbied for Chinese businesses, Ms Reynolds said: 'I can categorically tell you I have never worked for the Chinese government, and I've never worked for Chinese business.' Wycombe MP Ms Reynolds took over the Treasury minister role from Tulip Siddiq, who stepped down over allegations linked to her aunt's political movement in Bangladesh. Downing Street has previously said there is no need for the minister to recuse herself from any decisions relating to China.
