City minister Harriett Baldwin wants financial services to secure economic recovery - but not at the expense of trust

James Nickerson
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Financial services have a dual role to play in economic recovery and expertise (Source: Getty)

Economic Secretary to the Treasury Harriett Baldwin said she wants the UK to retain a "globally competitive finance sector", but added that it must also focus on building trust.

Financial services are "visibly successful", contributing to economic growth at a high level, she said. Her vision for the sector, however, is for it to play a leading role in securing economic recovery and spurring innovation.

In a speech at the City UK conference in London, she said:

Financial services has a dual role in terms of generating economic growth. As a high-performing sector in itself, it of course generates jobs and pays taxes. In fact, it contributes almost a sixth of the total UK economic output and 12 per cent of total UK tax receipts.

But it also provides finance, expertise and advice to millions of other individuals and companies.

Banks should deliver for people, building “a solid bedrock of trust” that makes companies more attractive, creating a successful sector that will in turn draw in people and businesses from around the world.

Read more: FCA launches competition investigation into investment and corporate banking

Over the past five years, the UK has been particularly focused on driving more competition in banking, the minister added. “More competition means that banks are more incentivised to offer their customers the best possible products and services.”

And it means more engaged consumers, demanding a better deal. The government has an ambitious programme of reforms to boost competition in banking.

Competition should create innovation, which Baldwin said will also have a knock-on effect for the financial technology sector.

The Conservative MP added that the government aims to make the UK the “global capital of fintech”.

Our fintech sector attracted over £340m in investments during 2014 – not only a record number, but one representing more than half of all Fintech investment in Europe. Fintech firms have created jobs, grown the economy, and made this country famous worldwide as a centre of expertise.

The government will finish the job of ensuring he UK has the best regulated financial system in the world, she added.

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