UK Financial Services

Debate between Kerry McCarthy and Jeremy Hunt

Tuesday 1st September 2026 Westminster Hall

[Sir Jeremy Hunt (Godalming and Ash) (Con)]

It is a pleasure to speak under your chairmanship, Mr Twigg. I speak today as chairman of the all-party parliamentary group for financial markets and services. I refer hon. Members to my entry in the Register of Members’ Financial Interests, which states that I accept speaking engagements from financial services companies.

I thank the hon. Member for Buckingham and Bletchley (Callum Anderson) not just for securing this debate, but for an excellent opening speech. He has a background in the City—in the stock exchange and working for the City of London corporation—which is probably unusual in his party. I thank him for deploying his expertise, because it is incredibly important for UK financial services that the world sees that there are experts in financial services on both sides of the House. I particularly welcome his comments today.

I welcome the Economic Secretary to the Treasury back to her role, which she carried out previously with great distinction. She has always engaged extremely constructively when it comes to the interests of the City and financial services. I know that her return to that post was widely welcomed. It is also a pleasure to speak alongside my hon. Friend the Member for Wyre Forest (Mark Garnier)—an old friend—who himself has a background in the London stock exchange.

After the financial crisis in 2008, financial services had a pretty bad name. The Government had to put up around £1 trillion to support the sector. Chief executives of banks made very ill-judged decisions to continue paying themselves large bonuses at a time when the rest of the country was suffering, and the country suffered a longer and deeper recession at that time as a result of our exposure to the financial services sector, which was much greater than that of our peers. We learned many painful lessons in that period.

As well as the financial crisis, the sector had to deal with the loss of passporting rights post-Brexit. Despite those body blows, the sector employs 2.5 million people—more than at the time of Brexit—and two thirds of the jobs are outside London. It is worth around 11% of our national output. It generates more than £110 billion in tax revenues, which is more than any other single sector. Put another way, it funds more than half the cost of running the NHS.

Whatever one’s interest in financial services, from a fiscal perspective alone they simply cannot be ignored. The sector is also thriving today in very challenging circumstances. The City think-tank Z/Yen tracks the competitiveness of global financial service hubs. In 2020, London trailed New York. Now it has caught back up. It remains the world’s premier centre for foreign exchange and specialist insurance. It helps to make the UK the world’s second largest services exporter.

When I was Chancellor, I introduced the Edinburgh and Mansion House reforms to support this important sector. Regulations, including listing rules, were simplified and the mighty task of making our pension fund industry fit for purpose was started. To their credit, this Government have built on those reforms with the Leeds reforms, the Pension Schemes Act 2026 and the forthcoming Financial Services and Markets Bill, all of which are extremely welcome. But, as the hon. Member for Buckingham and Bletchley said, our competitors are not standing still.

With smart policies, our financial services sector could do even more for growth in the UK. Easy access to finance, alongside having the most respected universities in the world outside the United States, has helped to create, for example, the world’s third-largest tech ecosystem. In artificial intelligence, the UK has the potential to be the world’s next silicon valley. If we get there, easy access to finance will have played a major role in making that possible.

What needs to happen next? The first thing is to do no harm—in particular, to do no harm with additional taxes in October’s Budget that could potentially damage the sector. Uniquely, the UK already charges higher corporation tax to banks. Total bank taxes are about 45% here, compared with 32% in Dublin and 28% in New York. I totally understand the temptation—finances are extremely tight, and the banks have few friends—but international capital is mobile, and hiking taxes further will mean that the sector ultimately generates less tax revenue, not more, for the Chancellor.

Secondly, we need to make regulation in UK financial services more proportionate. Consumer protection really matters, but we cannot eliminate all risk, which is what our regulators sometimes appear to be trying to do. Compliance now costs the sector more than £39 billion a year—about 13% of operating costs. We should aim to at least halve that using the new international competitiveness and growth objectives, which the Financial Conduct Authority should apply to authorisation, supervision and enforcement decisions.

[Kerry McCarthy]

I too worked in the financial markets, although I think I have done a better job of hiding it in my 21 years in Parliament. I was more on the debt market side. In fact, I am so old that I was part of the salvage operation for Barings bank when it went under. That brings me to the right hon. Gentleman’s point about regulation. The management of Barings did not have a clue what its traders were doing, and the regulators certainly did not have a clue what Barings was doing. I strike a note of caution. I worked for an American investment bank, so I saw the Securities and Exchange Commission as well as the UK regime. Where do we strike the balance between ensuring that there is not another collapse of a bank and light-touch regulation?

Myalgic Encephalomyelitis

Debate between Kerry McCarthy and Jeremy Hunt

Wednesday 19th November 2025 Westminster Hall

[Sir Jeremy Hunt (Godalming and Ash) (Con)]

It is a privilege to speak under your chairship, Mr Mundell. I thank the hon. Member for Wells and Mendip Hills (Tessa Munt) for calling this debate.

I would like to use my short time to tell the story of a young man who made me understand the tragedy of ME six years ago. He was a very promising first-year student at Durham University called Tom. He was on track to get a first in maths. He was a big hockey player, but in his second year, he started struggling, first to walk upstairs and to climb hills, and eventually he found that he could not wash himself, eat by himself or even read. Then, to his enormous frustration, he dropped out in his third year. When all his friends were starting a new life with their first job, he had to stay at home and go through the nightmare of first trying to get a diagnosis and get someone to agree that he had a problem, and then trying to get treatment for it.

Tom felt that he was going in circles: doctors were not really persuaded and he was not getting any answers. He was very lucky because he had two remarkable parents, Alex and Denise, who could afford to go to America. In fact, they moved to America and they got him enrolled on clinical trials. This story has a positive ending, because six years on, he is doing incredibly well. He is actually thriving; he has a job and a partner, and his life is back on track—except, sadly, in America rather than here.

As the hon. Member for Wells and Mendip Hills said, there are 400,000 people with ME or with long covid symptoms that are like severe ME. For some of them, it is already too late. Maeve Boothby O’Neill and Sarah Lewis tragically lost their lives, and coroners issued prevention of future deaths notices.

[Kerry McCarthy (Bristol East) (Lab)]

Sarah Lewis was my constituent. I have here the prevention of future deaths report that was issued after the inquest. She took her own life, but was severely ill with ME. One thing that comes through very strongly is that she did not feel she was believed or taken seriously, or that her symptoms were recognised by the medical profession. It is so important that we challenge the medical profession to take this more seriously.

[Sir Jeremy Hunt]

I thank the hon. Lady for talking about that very sad case. I actually think that the NHS is better than it was because of long covid.

The real cause for hope is Edinburgh University’s DecodeME study, which the chief executive of Action for ME, Sonya Chowdhury, described to me as being like a treasure hunt map with eight crosses where there is a genetic code that matches ME, but where we then have to go and dig up that treasure. That is what is now waiting to happen, and why funding is so important.

Ultimately, with the quality of research in this country, there should be no need for anyone to have to go to the United States or Germany for their treatment. During the pandemic, more lives were saved through treatments and vaccines discovered in this country than any other country in the world. We have amazing research happening here.

My plea to the Government is this: the last Government started the process by ignoring some of the scepticism in the medical community about whether ME was really a serious condition. It would be fantastic, and it would give so much hope, if this Government could now finish the job and invest in research that will transform the lives of so many people like Tom.