**CHECK AGAINST DELIVERY**

Minister, my Lords, Ladies and Gentlemen, good evening and a very warm welcome to this magnificent Guildhall for the UK Finance Annual Dinner, in association with EY.

I am delighted to see so many of you here. Thank you for coming. Thanks in particular to Nikhil Rathi, Chief Executive of the Financial Conduct Authority (FCA) for joining us as our guest speaker. Nikhil needs little introduction to anyone in this room, he has been private secretary to two UK Prime Ministers, was Director of Financial Services at HM Treasury, and was CEO of the London Stock Exchange. Nikhil, we look forward to hearing from you shortly.

UK banking and finance represents one of the UK’s few world-leading sectors and the government needs to safeguard and promote our international competitiveness. I would say, not to just look at our sector as one to regulate and tax, but to partner with to deliver government priorities on growth, greening our nation, fighting economic crime and embracing the digital age.  

Tomorrow we will hear the chancellor’s Autumn Statement and I anticipate that to the extent it hasn’t already, ‘normal service will be resumed’ in that the government will announce further measures to restore the UK’s traditional reputation for sound management of the public finances.

While we recognise that tough decisions need to be taken against the fiscal backdrop the nation faces, I hope that he will also recognise the importance of this partnership our sector offers. That means recognising the excessive rates of aggregate taxes on banks in London compared with other global financial centres, particularly Amsterdam, Frankfurt, Dublin and New York – as demonstrated by the independent evidence we have recently and repeatedly presented to HM Treasury.

It also means supporting us to take advantage of the strategic opportunities our industry faces.

Right now, UK Finance is closely engaged with our members to continue to serve the needs of households and businesses across the UK with compassion during a cost of living crisis, and whatever further challenges the Ukraine war may throw up.

But looking further out, the government’s objectives on climate change can only be facilitated through our sector’s financial capacity. The government does, however, urgently need to develop a comprehensive plan to green our housing stock and David will talk about what is needed in detail shortly.

Economic crime costs the UK billions of pounds a year and devastates its victims’ lives. Given the amount our sector spends on anti-economic crime measures, I would say that our sector provides the nation’s fraud police. The work we have tirelessly done to build public and private partnerships to tackle economic crime has been world-leading in terms of innovation and content. We now need government to step up and deliver not just the Economic Crime and Corporate Transparency Bill with its new information and intelligence-sharing powers designed largely by us, but also to embrace our latest ideas around a risk-based approach to payments, improve system coordination delivery of the national fraud plan, and be more ambitious than the current Bill envisages to improve Companies House. We certainly stand ready to do our part in support of the police and agencies in our ever closer partnership.

On digital, let me just say that like it or not, crpyto based technologies and services are moving from the periphery to the mainstream. I think government and regulators have so far been somewhat reactive and focussed mainly through the consumer protection lens when it comes to designing regulation for digital innovation. The recent Basel Committee proposals could in my view drive this nascent but potentially huge growth business out of the regulated sector into the unregulated.

While the government and the FCA have taken some welcome steps to promote the UK in this area, I would like to see a more proactive partnership between government, regulators and our industry to seize the opportunity new technologies offer, not just address the risks.

Let’s work together to make the UK the thoughtful global leader in digital tokenisation regulation and embrace its inevitable growth, rapidly progressing our thinking on a Central Bank Digital Currencies (CBDC), Digital ID and creating the best regime in the world for what I call “good digital tokenisation”.

So tonight I call on - and offer to support the government in creating - a new top level Digital Tokenisation Task Force. It would need to include at least UK Finance, the Investment Association, Association of British Insurers, the Law Society, HM Treasury, the FCA, Prudential Regulation Authority and key market participants. This group could usefully work together on a strategy to make the UK the thoughtful global leader in digital tokenisation regulation, embracing its inevitable growth and rapidly progressing our thinking on issues like a CBDC, Electronic-id and creating the best overall regime in the world for what I call good digital tokenisation. And if anyone is worried about another taskforce, I am reminded of my favourite Pericles quote – instead of looking on discussion as a stumbling block in the way of action, we think it an indispensable preliminary to any wise action at all!

We welcome the government’s approach to reviewing our wider regulatory regime to make sure it is fit for purpose post-Brexit. The Financial Services and Markets Bill will, we hope, deliver much of what we have all designed together after recent reviews and over the last few years. I believe however, there is much further to go once regulators have more focus on promoting competitiveness, not just consumer protection, safety and soundness, for example, to move to full proportional regulation of our mid-tier and smaller banks. Finally, our regulators must stay at the forefront of applying the principles of ‘same activity, same risk, same regulation’ to the big tech platforms who are increasingly moving into our business, but without equivalent regulation. Delivering the Online Safety Bill, with the anti-fraud responsibilities for the big techs we have fought hard to get included, is vital and we thank Richard Lloyd and the FCA generally for their vocal support on this.

I want to finish on a very positive note. I believe our industry has demonstrated that it understands our societal purpose in these challenging times and will continue to do so during the cost of living crisis; we are already paying more than our fair share of taxes and working harder than anyone to fight economic crime. With a renewed focus on international competitiveness and a more partnership-oriented approach, I believe together, our industry, government and regulators can make the UK the best, safest, and most transparent place to conduct financial services business in the world – and become a leader in good digital tokenisation. Why would we not strain every sinew to make the UK the global leader what it is, arguably the inevitable future of our most successful sector.

In summary – let’s give ourselves reason to use my second favourite Pericles quote- “because of the greatness of our city, the fruits of the whole earth flow in upon us, so that we enjoy the goods of other countries as freely as our own!” in any event, I am incredibly proud to represent our industry and very optimistic about its prospects. Ladies and Gentlemen, I ask you to be upstanding and raise a glass to the future prosperity of our finance and banking industry and a continuing close collaboration with government to ensure we retain our world-leading position.

The toast is ”banking and finance”.