There are “green shoots” of recovery across the economy, according to a leading Treasury official, as the government looks to forge a new path for the financial services sector in the wake of Brexit.
The economy has hit an “inflection point”, economic secretary to the Treasury John Glen told TheCityUK’s annual conference on 15 June, raising the prospect of a future regulatory regime that was more aligned to the UK’s needs.
“While the crisis is not over we are starting to see some positive signs that the government’s economic support measures are taking effect” he said. “While this has been an extremely challenging period, we are now at an inflection point. As a country, we are starting to move out of the crisis and on to even greater levels of economic success.”
Glen said that 1.3 million employees moved off furlough during March and April as the country entered a “pivotal moment” in the fightback against Covid-19, but the government remained committed to helping businesses spread those opportunities across the country.
He praised the efforts of businesses for adapting to remote working, helping to facilitate support such as the government’s bounce back loans, and maintaining levels of client service during the pandemic.
“There can be no doubt that the UK’s financial services sector is a real success story,” he said. “While the last 16 months have been far from easy for you, they have also highlighted your very best qualities. You have shown your adaptability… you have shown your importance to the economy… last but not least, you have shown your care for your customers.”
Moving forward, Glen said that the government was currently in discussions with a number of countries about the future of the UK’s financial services sector, including the US, China, India, Brazil and Australia.
“Our plan is for an open, greener and more technologically advanced industry with world-leading agile regulation that supports competitiveness,” he said.
As the Treasury weighs responses to its consultation on the future of the UK’s financial services regulatory framework, Glen said the government was “looking closely at how we can tailor our laws to better fit UK markets”.
Opening the conference, former Aviva chairman Adrian Montague echoed the positive economic outlook as the UK moves out of the coronavirus crisis.
“Of course, there are huge challenges ahead,” he said. “But the economy is reopening and as a nation, we are building good momentum as we emerge out of the pandemic.”
However, he noted that it would “take some time to reform” the UK’s relationship with the EU.
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