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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Chancellor. Since we last spoke,

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Speaker 1: Donald Trump has been re elected. Does that change your

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Speaker 1: secure andomics vision, given it was at least partly inspired

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Speaker 1: by Bidenomics.

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Speaker 2: Well, the idea of secure nomics is that we build

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Speaker 2: a strong and secure economy on strong foundations. And that

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Speaker 2: does mean thinking about where things are made and who

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Speaker 2: makes them. It means being more resilient in the face

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Speaker 2: of shops, whether those be energy price shocks or pandemics.

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Speaker 2: And I think those are important principles because the UK

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Speaker 2: has found itself very exposed, whether it is the energy

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Speaker 2: price shock after Russia's invasion of Ukraine or during the

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Speaker 2: pandemic and struggling to get the supplies of vital equipment

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Speaker 2: that there needed.

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Speaker 1: But would you rule out regulatory tariffs?

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Speaker 2: Well, look, I think it'd be wrong to speculate what

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Speaker 2: an incoming US administration would do. But we benefit, and

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Speaker 2: so does the United States, from trade worth more than

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Speaker 2: three hundred billion pounds a year. That trade is growing

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Speaker 2: and it's important for the prosperity of both the United

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Speaker 2: Kingdom and the United States. And we'll continue to make

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Speaker 2: representations for free and open trade that benefits both of

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Speaker 2: our nations.

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Speaker 1: Okay, let's turn to your Mansion House speech. When it

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Speaker 1: comes to harnessing pension money to boost growth. What are

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Speaker 1: you going to offer in terms of reform that your

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Speaker 1: conservative predecessors didn't.

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Speaker 2: Well, I've long believed that we need to reform how

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Speaker 2: the UK pension system works, and I welcome what the

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Speaker 2: previous government and what Jeremy Hunt did when he was

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Speaker 2: Chancellor to look at the consolidation and the investment choices

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Speaker 2: of pension funds. But I want to go further because

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Speaker 2: there's more that we can do to unlock that long

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Speaker 2: term patient capital to help British businesses like Quell where

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Speaker 2: we are today in White City in London and others,

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Speaker 2: and also to help secure investment into infrastructure. If you

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Speaker 2: look around the world, so countries like Canada where I

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Speaker 2: was in the summer, or Australia, they have mega pension

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Speaker 2: funds that achieve economies of scale, get better returns for

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Speaker 2: their savers and help unlock that long term growth that

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Speaker 2: we desperately need in Britain.

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Speaker 1: You mentioned Australia. Australia gives tax breaks to funds that

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Speaker 1: invest in domestic companies. Where you offer the same.

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Speaker 2: We already have very generous tax breaks for investing in pensions,

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Speaker 2: and rightly so, we want to incentivize people to invest

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Speaker 2: and save for the future. What we don't have in

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Speaker 2: the UK is mega pension funds. We don't have those

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Speaker 2: economies of scale in our pension funds, which is why

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Speaker 2: the interim report that we're publishing looks at having a

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Speaker 2: minimum size of twenty five or fifty billion pounds, similar

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Speaker 2: to what you have in Canada and the United States.

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Speaker 2: Those sorts of mega funds will have the expertise to

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Speaker 2: make those investments, both in startup and scale up businesses

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Speaker 2: and in British infrastructure.

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Speaker 1: At the size matters, but I'm wondering how you get

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Speaker 1: that money into UK companies. Are you looking at mandatory minimums.

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Speaker 2: We're not looking at mandating pension funds. What we're looking

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Speaker 2: at in these reforms, building on the reforms of the

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Speaker 2: previous government, is to create a smaller number of big

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Speaker 2: pension funds with the expertise and the scale to make

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Speaker 2: those long term investments. Quell where we are today received

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Speaker 2: money from the British Business Bank, which leverages in private

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Speaker 2: sector investment, but most of the funding that this business

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Speaker 2: and so many other scale up businesses in Britain have

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Speaker 2: been able to access comes from the United States. I

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Speaker 2: don't want it just to be US investors benefiting from

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Speaker 2: investment in UK startups and scale ups. I want savers

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Speaker 2: here in Britain to be able to benefit from that

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Speaker 2: growth potential that we see at this business and so

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Speaker 2: many others.

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Speaker 1: Terms of there's also the issue of how you get

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Speaker 1: more money into the pension parts. In the first place.

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Speaker 1: Employers are already squeezed by the tax hikes in the budget.

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Speaker 1: How are you going to address that.

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Speaker 2: By the end of this decade, we expect to have

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Speaker 2: one point three trillion pounds in pension funds, either in

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Speaker 2: DC or in the local government pension scheme. But I

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Speaker 2: don't think anyone believes that money is working well enough,

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Speaker 2: either for savers or indeed for our wider economy. And

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Speaker 2: the reforms that we're bringing in is about ensuring that

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Speaker 2: the money that is invested the assets under management work

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Speaker 2: better for the UK economy and work better for savers.

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Speaker 1: I'm just wondering what's different to what Jeremy Hunt did,

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Speaker 1: because he just finished this consultation into consolidating the local

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Speaker 1: government pension scheme. It made these exact points. Do you

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Speaker 1: really need another consultation.

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Speaker 2: The difference between what we're doing and what the previous

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Speaker 2: government did is that we're going to legislate and the

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Speaker 2: previous government haven't had a pensions bill, didn't have a

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Speaker 2: pensions bill for around five years. We have a slot

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Speaker 2: in the king Speech for a pensions bill in this

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Speaker 2: session of Parliament. Will be introducing legislation in the Mark

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Speaker 2: in the spring, so that we don't just talk about

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Speaker 2: consolidation in the pension industry. Anyone can do that, but

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Speaker 2: we actually make sure that it happens. That's the difference

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Speaker 2: between this government and the previous government. We're getting on

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Speaker 2: and doing the job.

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Speaker 1: All right, what about the regulators? How are you going

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Speaker 1: to make them prioritize competitiveness?

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Speaker 2: Well, I'll be publishing the remit letters to the regulators

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Speaker 2: tomorrow at the met Mansion House Speech. Obviously, regulation is

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Speaker 2: incredibly important both for protecting consumers but also for protecting

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Speaker 2: our wider economy. But we don't just need to regulate

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Speaker 2: for risk. We also need to regulate for growth. There's

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Speaker 2: huge growth potential in our financial services sector. The secondary

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Speaker 2: objective that we supported in opposition is really important, but

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Speaker 2: we now need to bring that to life and ensure

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Speaker 2: that our regulatory system helps businesses to grow, not just

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Speaker 2: manage risk.

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Speaker 1: But Chancellor, US investors tell us that all these recent

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Speaker 1: regulatory reviews make investing in UK financial services less attractive.

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Speaker 1: Are you planning anything to give them more certainty?

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Speaker 2: We had a very welcome response over the last few months,

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Speaker 2: whether that's to our changes in ring fencing rules, our

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Speaker 2: implementation of the Basel rules, or indeed the SAA's rules

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Speaker 2: around listing in London. Things that we've done in our

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Speaker 2: first four months of government to make Britain a more

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Speaker 2: attractive place for global investors in financial services. We've brought

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Speaker 2: in sixty three billion pounds worth of investment at the

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Speaker 2: International Investment Summit just a few weeks ago. So we

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Speaker 2: recognize the important role that regulators have in encouraging growth

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Speaker 2: in financial services, not just managing down risk.

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Speaker 1: I mean it's the motor services they're pointing to, and.

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Speaker 2: There's a court case at the moment, so it's important

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Speaker 2: to let that work through the system and be up

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Speaker 2: to the motor finance companies whether they appeal the court decision.

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Speaker 2: It is welcome that that sector continues to offer motor

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Speaker 2: finance through a number of workarounds. But it's now up

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Speaker 2: to those individual companies whether they want to appeal the

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Speaker 2: court decision.

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Speaker 1: All right, Chancellor, good luck with you, mana and House

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Speaker 1: speech tomorrow. Thank you very much.

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Speaker 2: Thank you,