City minister denounces ‘armchair generals’ creeping into pace of much-needed reform as two firms opt to float in London in two days
City Secretary Andrew Griffith has hit back at ‘armchair generals’ stalking the pace of much-needed reform – as London’s market re-energized.
Griffith’s comments mark six months since the government launched the ‘Edinburgh reforms’ to bolster the UK’s status as a global financial centre.
Some changes can already pay off.
Yesterday, fintech firm CAB Payments became the second company in two days to outline plans for a major listing in London, worth up to £1 billion.
A day earlier, Turkish chemical giant WE Soda said it would pursue an initial public offering (IPO) in the UK, worth up to £7bn after ‘significant’ interest from backers.
Confidence: City Secretary Andrew Griffith (pictured) insisted the government implement reforms that will preserve Britain’s status as a leading global financial center
Analysts said the latest float plans were a “boost for London” after a series of disappointments, including Cambridge-based chip designer Arm’s decision to list in New York.
Still, critics, including former London Stock Exchange boss Xavier Rolet, say more needs to be done to restore London’s position as a prime location.
Griffith said: ‘It’s been a productive six months since we launched the Edinburgh reforms.’
Laws expected to be passed by parliament shortly will “strengthen our competitiveness on a global scale,” he said.
“We’re not stopping here though – we’re changing the Solvency II framework and reforming pension funds that together will release billions of pounds to boost growth and investment,” added Griffith.
“This is a bumper package for the industry, and while some armchair generals remain determined to comment from the sidelines, we are implementing reforms that will maintain our status as a leading global center for financial services.”
Griffith keeps a weekly overview of the progress of the 30 Edinburgh reforms announced last December: six have been ‘delivered’ while 24 are ‘on track’.
The next milestone is the Financial Services and Markets Act, which is due to come into force at the end of June.
The idea behind it is to capitalize on the opportunities of Brexit by aligning financial services rules with the UK market.
Meanwhile, a first major part of the changes to the Solvency II rules, which apply to the insurance and pension sector, appear to be in effect by the end of the summer.
This has to do with rules that lower the ‘risk margin’, a capital buffer that insurers must maintain against the risk of shocks.
And some changes have come into effect, such as reduced requirements for the minimum portion of an inventory that must be sold, dropped from 25 percent to 10 percent.
The government and leading City figures are trying to boost London’s status after damaging blows, such as Cambridge chip designer Arm’s decision to go public in New York.
Others, such as Paddy Power owner Flutter, are also considering a move to the US. And yesterday CRH, the Dublin-based building materials group, sealed its exit to Wall Street as investors backed a move.
But not everyone has found success. Figures from investment bank Lazard showed yesterday that three of the 22 British companies listed in the US since 2010 are trading above their initial IPO price.
Susannah Streeter, of Hargreaves Lansdown, said the latest float plans were a ‘boost for London’.
But she added: “After the drought of IPOs in the capital, the taps are now slowly being turned on and the flotation tank is starting to fill up, but don’t expect the trickle to turn into a flood just yet.”