Written questions by Anderson.

What assessment her Department has made of the potential contribution of the Mansion House compact on levels of pension investment.

The Mansion House Compact is a voluntary industry-led initiative with eleven signatories to secure better outcomes for defined contribution (DC) savers by increasing pension investment into unlisted equity. The ambition is to allocate at least 5% of the DC default funds to unlisted equities by 2030 and increase the proportion of UK pension and other relevant investments in unlisted equities. The Government continues to monitor progress on the Mansion House commitments in collaboration with the Association of British Insurers (ABI). An update from the ABI suggests that signatory pension firms are making progress on these ambitions. The ABI’s latest publication highlights that firms have laid strong foundations to implement the commitment of allocating 5% of DC default funds to unlisted equities by 2030. Ten of the eleven signatories to the compact have taken steps to establish or expand their expertise in unlisted equity investment. Furthermore, eight of the eleven signatories have begun to develop specific solutions to enable increased unlisted equity investment. The Government is also taking further proactive steps to increase investment in innovative businesses. In November, the British Business Bank completed its £250m Long Term Investment for Technology and Science (LIFTS) investment alongside £250m from Phoenix Group with Schroders Capital. The £500m investment vehicle will invest in UK late-stage companies focused on technology and science, with 20% of the fund expected to be invested in life sciences. Additionally, two UK pension funds, Aegon UK and NatWest Cushon, have agreed to collaborate with the British Business Bank on launching the British Growth Partnership to crowd-in institutional investment into venture capital funds and innovative businesses here in the UK.

What assessment her Department has made of the impact of (a) Venture Capital Trusts, (b) the Enterprise Investment Scheme, (c) the Seed Enterprise Investment Scheme and (d) the Social Investment Tax Relief on economic growth in the last five fiscal years.

Growth is the central mission of the Government, and investment is a vital part of addressing the growth challenge. The venture capital schemes are a key part of this. The venture capital schemes were evaluated in 2022, and these evaluations were published on gov.uk. [1] The evaluations found that the schemes were well targeted to address the market failure which makes it difficult for early-stage, high-risk companies to secure the investment they need. SITR expired in April 2023. [1] Evaluation of Venture Capital Schemes - GOV.UK

With reference to her Department's policy paper entitled 2025 UK-China Economic and Financial Dialogue: fact sheet, published on 11 January 2025, what steps the Government plans to take to help implement new (a) commercial licences and (b) quota allocations for UK firms in China.

As the Chancellor’s Statement to the House on 14th January set out, the dialogue has delivered a set of tangible benefits to ensure that British firms have greater access to the world’s second largest economy, while safeguarding our national security and securing commitments to enhance financial regulatory and supervisory cooperation. The total value of what was agreed is worth £600 million over the next five years for the UK economy and sets us on course to deliver up to £1 billion of value for the UK economy. In particular, the agreement secured: new licences and quota allocations for UK asset managers, which will immediately improve their operating access and competitiveness in China; the launch a feasibility study into a UK-China Wealth Connect; the launch of UK-China over-the-counter bond business, which allows international investors to trade and settle RMB bonds more easily through the UK; and a commitment for the issuance of Sovereign and Corporate green bonds in the UK solidifying the City’s role as a Global Financial Centre and benefitting UK firms through increased fees for delivering this business.

What steps the Government plans to take to help asset management firms access the Chinese market.

As the Chancellor’s Statement to the House on 14th January set out, the dialogue has delivered a set of tangible benefits to ensure that British firms have greater access to the world’s second largest economy, while safeguarding our national security and securing commitments to enhance financial regulatory and supervisory cooperation. The total value of what was agreed is worth £600 million over the next five years for the UK economy and sets us on course to deliver up to £1 billion of value for the UK economy. In particular, the agreement secured: new licences and quota allocations for UK asset managers, which will immediately improve their operating access and competitiveness in China; the launch a feasibility study into a UK-China Wealth Connect; the launch of UK-China over-the-counter bond business, which allows international investors to trade and settle RMB bonds more easily through the UK; and a commitment for the issuance of Sovereign and Corporate green bonds in the UK solidifying the City’s role as a Global Financial Centre and benefitting UK firms through increased fees for delivering this business.

What assessment she has made of the potential impact of new UK-China over-the-counter bond trading on future trends in the UK's economic growth rate.

As the Chancellor’s Statement to the House on 14th January set out, the dialogue has delivered a set of tangible benefits to ensure that British firms have greater access to the world’s second largest economy, while safeguarding our national security and securing commitments to enhance financial regulatory and supervisory cooperation. The total value of what was agreed is worth £600 million over the next five years for the UK economy and sets us on course to deliver up to £1 billion of value for the UK economy. In particular, the agreement secured: new licences and quota allocations for UK asset managers, which will immediately improve their operating access and competitiveness in China; the launch a feasibility study into a UK-China Wealth Connect; the launch of UK-China over-the-counter bond business, which allows international investors to trade and settle RMB bonds more easily through the UK; and a commitment for the issuance of Sovereign and Corporate green bonds in the UK solidifying the City’s role as a Global Financial Centre and benefitting UK firms through increased fees for delivering this business.

What assessment she has made of the potential impact of recent trends in the level of retail investment on economic (a) growth and (b) resilience.

The Government wants to see more consumers participate in capital markets and benefit from the long-term financial security and returns that investing can provide. The Financial Services Growth & Competitiveness Strategy call for evidence, which closed on 12 December, identified that increasing retail participation in capital markets could support long-term sustainable growth within the sector and the wider economy. The call for evidence welcomed further evidence on how to improve consumer engagement with investing, and the Government is considering the feedback provided. The Government is already taking forward work to improve the information available to retail investors to help with their decision-making. This includes reforms to the UK’s retail disclosure regime and exploring options to expand the availability of support through the joint Government and FCA review of the boundary between financial advice and guidance.

Whether she plans to take steps to support greater supervisory data sharing between UK and Chinese financial regulators.

As the Chancellor’s Statement to the House on 14th January set out, the dialogue has delivered a set of tangible benefits to ensure that British firms have greater access to the world’s second largest economy, while safeguarding our national security and securing commitments to enhance financial regulatory and supervisory cooperation. The total value of what was agreed is worth £600 million over the next five years for the UK economy and sets us on course to deliver up to £1 billion of value for the UK economy. In particular, the agreement secured: new licences and quota allocations for UK asset managers, which will immediately improve their operating access and competitiveness in China; the launch a feasibility study into a UK-China Wealth Connect; the launch of UK-China over-the-counter bond business, which allows international investors to trade and settle RMB bonds more easily through the UK; and a commitment for the issuance of Sovereign and Corporate green bonds in the UK solidifying the City’s role as a Global Financial Centre and benefitting UK firms through increased fees for delivering this business.

What assessment she has made of the potential impact of China's commitment to issue an inaugural offshore sovereign green bond on the competitiveness of the domestic financial sector.

As the Chancellor’s Statement to the House on 14th January set out, the dialogue has delivered a set of tangible benefits to ensure that British firms have greater access to the world’s second largest economy, while safeguarding our national security and securing commitments to enhance financial regulatory and supervisory cooperation. The total value of what was agreed is worth £600 million over the next five years for the UK economy and sets us on course to deliver up to £1 billion of value for the UK economy. In particular, the agreement secured: new licences and quota allocations for UK asset managers, which will immediately improve their operating access and competitiveness in China; the launch a feasibility study into a UK-China Wealth Connect; the launch of UK-China over-the-counter bond business, which allows international investors to trade and settle RMB bonds more easily through the UK; and a commitment for the issuance of Sovereign and Corporate green bonds in the UK solidifying the City’s role as a Global Financial Centre and benefitting UK firms through increased fees for delivering this business.

What information her Department holds on the total value of investments in (a) cash, (b) stocks and shares, (c) innovative finance and (d) lifetime ISAs in each of the past five tax years, broken down by investors' income bracket.

Information on the total value of ISA subscriptions, the total market value of ISAs, and the number of ISA holders and subscribers broken down by income bands is available in HMRC’s Annual Savings Statistics.https://www.gov.uk/government/collections/annual-savings-statistics

What information her Department holds on the total market value of (a) cash and (b) stocks and shares ISA holdings in each of the past five tax years, broken down by investor income bracket.

Information on the total value of ISA subscriptions, the total market value of ISAs, and the number of ISA holders and subscribers broken down by income bands is available in HMRC’s Annual Savings Statistics.https://www.gov.uk/government/collections/annual-savings-statistics

What steps her Department is taking to manage potential risks associated with distributed ledger technology during the pilot digital gilt instrument issuance.

This pilot would allow us to make more informed decisions on Distributed Ledger Technology’s (DLT) potential future application to wider government debt issuance. Demonstrating feasibility on a government bond issuance will also support the private sector by providing a use case that will assist their own use and investment in the technology. The pilot puts the UK at the forefront of capital markets innovation. This experimental issuance is separate from the government’s normal operations and overall debt issuance programme. The pilot will utilise the Digital Securities Sandbox (DSS), which opened for applications in September 2024. The DSS utilises temporary modifications to legislation to provide an environment where firms can use developing technology, in particular DLT, to create, trade, and manage securities, under the supervision of the Bank of England and the Financial Conduct Authority (FCA). This enables activity to happen in a controlled and monitored setting, ensuring that potential risks are managed while fostering innovation. I set out in a Written Ministerial Statement on 18 November 2024, that the government will engage with the financial sector in the new year to explore what the issuance could look like and the technology options available to facilitate it.

What criteria her Department plans to use to assess the effectiveness of the digital gilt instrument pilot.

This pilot would allow us to make more informed decisions on Distributed Ledger Technology’s (DLT) potential future application to wider government debt issuance. Demonstrating feasibility on a government bond issuance will also support the private sector by providing a use case that will assist their own use and investment in the technology. The pilot puts the UK at the forefront of capital markets innovation. This experimental issuance is separate from the government’s normal operations and overall debt issuance programme. The pilot will utilise the Digital Securities Sandbox (DSS), which opened for applications in September 2024. The DSS utilises temporary modifications to legislation to provide an environment where firms can use developing technology, in particular DLT, to create, trade, and manage securities, under the supervision of the Bank of England and the Financial Conduct Authority (FCA). This enables activity to happen in a controlled and monitored setting, ensuring that potential risks are managed while fostering innovation. I set out in a Written Ministerial Statement on 18 November 2024, that the government will engage with the financial sector in the new year to explore what the issuance could look like and the technology options available to facilitate it.

Whether her Department is taking steps to involve private sector firms in developing distributed ledger technology for the digital gilt instrument pilot.

This pilot would allow us to make more informed decisions on Distributed Ledger Technology’s (DLT) potential future application to wider government debt issuance. Demonstrating feasibility on a government bond issuance will also support the private sector by providing a use case that will assist their own use and investment in the technology. The pilot puts the UK at the forefront of capital markets innovation. This experimental issuance is separate from the government’s normal operations and overall debt issuance programme. The pilot will utilise the Digital Securities Sandbox (DSS), which opened for applications in September 2024. The DSS utilises temporary modifications to legislation to provide an environment where firms can use developing technology, in particular DLT, to create, trade, and manage securities, under the supervision of the Bank of England and the Financial Conduct Authority (FCA). This enables activity to happen in a controlled and monitored setting, ensuring that potential risks are managed while fostering innovation. I set out in a Written Ministerial Statement on 18 November 2024, that the government will engage with the financial sector in the new year to explore what the issuance could look like and the technology options available to facilitate it.

What the role of the (a) Bank of England and (b) Financial Conduct Authority will be in regulatory oversight of the digital gilt instrument pilot.

This pilot would allow us to make more informed decisions on Distributed Ledger Technology’s (DLT) potential future application to wider government debt issuance. Demonstrating feasibility on a government bond issuance will also support the private sector by providing a use case that will assist their own use and investment in the technology. The pilot puts the UK at the forefront of capital markets innovation. This experimental issuance is separate from the government’s normal operations and overall debt issuance programme. The pilot will utilise the Digital Securities Sandbox (DSS), which opened for applications in September 2024. The DSS utilises temporary modifications to legislation to provide an environment where firms can use developing technology, in particular DLT, to create, trade, and manage securities, under the supervision of the Bank of England and the Financial Conduct Authority (FCA). This enables activity to happen in a controlled and monitored setting, ensuring that potential risks are managed while fostering innovation. I set out in a Written Ministerial Statement on 18 November 2024, that the government will engage with the financial sector in the new year to explore what the issuance could look like and the technology options available to facilitate it.

Whether her Department plans to bring forward proposals to block public listings on national security grounds.

The previous government consulted on a power to block listings on national security grounds and published a summary of responses to this consultation in December 2021. The government keeps all policy under review.

What steps her Department plans to take to help incentive retail investment in domestic public companies.

The Government is committed to reinvigorating our capital markets to deliver growth across the UK and is pursuing ambitious reforms to make our markets even more competitive. This is why we supported the implementation of the Financial Conduct Authority’s (FCA) listing reforms, and are supportive of the reform to overhaul the Prospectus rules to improve access for retail investors in the capital raising process. The Government is also taking forward work to improve the information and support available to retail investors to help with their decision-making. This includes reforms to the UK’s retail disclosure regime and exploring options to expand the availability of investment support through the joint Government and FCA review of the boundary between financial advice and guidance. Additionally, individuals can also save up to £20,000 into an Individual Savings Account (ISA) each year, including Stocks and Shares ISAs, and any savings income received within an ISA is tax free.

Whether the Government plans to accept all recommendations of the Digitisation Taskforce Interim Report, published July 2023.

The work of the Digitisation Taskforce is ongoing and it has not yet made any recommendations to government. The government looks forward to the taskforce providing its final report and will set out its response after that.

What further fiscal steps she is taking to help increase the international competitiveness of the UK's listing regime.

The government is committed to reinvigorating our capital markets to deliver growth across the UK and is pursuing ambitious reforms to make our markets even more competitive. The Chancellor will announce any fiscal decisions at the Budget in the usual way.

What steps her Department is taking to increase private investment in scale-up companies.

This government has been clear: our number one mission is driving economic growth to improve the lives of the British people. To grow our economy, we need more high quality, long-term investment. This means creating a new partnership with businesses and making sure Britain is the best place in the world to invest. The government is strengthening the British Business Bank’s ability to support the UK’s fastest growing, most innovative companies by establishing the British Growth Partnership. The British Growth Partnership is a new, pathfinder approach to the partnership between the British Business Bank and institutional investors that will further the government's goal, as set out in the Pensions Investment Review, of encouraging more UK pension fund investment into UK growth assets. The British Business Bank, the UK's largest domestic venture capital investor, will launch a new fund to attract pension and institutional investment into venture capital and innovative businesses, with the aim of making investments by the end of 2025. The government expect both successful bidders of the Long-Term Investment for Technology and Science (LIFTS) competition, Schroders and ICG, to begin making investments via their new funds in late 2024, supported by pensions capital from Phoenix Group, with the aim of generating over a billion pounds of investment into UK science and technology companies. To provide greater certainty for investors and businesses, we have extended the Enterprise Investment Scheme (EIS) and the Venture Capital Trust (VCT) schemes by ten years to 5 April 2035. This will ensure the schemes continue to be available to support scale-up companies. Finally, in April 2024, the British Business Bank and Innovate UK signed a Memorandum of Understanding to help create new pathways for private investment into scale-ups, to better scale firms and address regional disparities.

What steps she is taking with Cabinet colleagues to promote the UK financial services industry in (a) Asia, (b) Africa and (c) other countries.

The financial services sector is one of the UK's greatest assets and will be at the heart of delivering the sustainable economic growth that is this government’s core mission. Promoting the financial services sector abroad will be central to our efforts to enhance the UK's international competitiveness and bolster its status as an open, global financial hub. We will continue to collaborate with international partners to increase trade and investment and shape global regulatory standards.