Financial services and technology are core segments of the UK’s economy, this is a fact both sides of the political spectrum agree on. But against a tough economic backdrop and a looming election, can the country achieve its fintech goals?
Lisa Cameron MP, the Conservative Party Chair of the Crypto and Digital Assets All Party Parliamentary Group (APPG), believes the government’s vision of a ‘digital Britain’ is within reach.
Whilst attending the The Payments Association’s (TPA) Pay360 conference last week, Payment Expert was able to speak exclusively with Cameron following her appearance on a panel discussing the future of cryptocurrency.
The UK’s economy has been struggling for some time, since the 2007 financial crisis if readers’ cast their minds back far enough. Getting the country to grow has been an objective of several Prime Ministers and, for Rishi Sunak, fintech and the digital economy has been the answer.
“We want to see the cryptocurrency hub developing in the UK, a digital Britain more widely I would say.”
Lisa Cameron MP
Fintech and tech in general will play a vital role in Britain’s economic future, Cameron told Payment Expert. The MP continued: “I started off in fintech when I started in the group, but now we’re looking at the underlying technology – blockchain, healthtech.
“It’s a digital generation we have. I have two young children and they are more technologically aware than I am. It’s nature to them to expect everything to be linked to digitisation and tech and finance is part of that.
“I feel this is going to be mainstream, the norm, and it’s going to be a huge part of the economy. That’s why I’m now asking questions on education, I’m asking questions on work and pension, I’m asking questions on science and innovation, to the Secretaries of State, because this is crucial, not just for the Treasury, it’s crucial right across government to be honest, for the future.”
Rishi Suank’s crypto ambitions have been made very clear in the two years since Cameron took on the role as Chair of the Crypto and Digital Assets APPG back in 2022, prior to her 2023 defection to the Conservatives from the Scottish National Party (SNP).
The Prime Minister and his Chancellor of the Exchequer, Jeremy Hunt, have placed tech and digital innovation as cornerstones of UK economic policy. Back in November, Hunt announced an investment of £500m in technology in the Autumn Budget, in particular AI. This support was reiterated in the Spring Budget this year.
Meanwhile, Sunak has voiced his support for responsible development of AI and has outlined his desire to see Britain become a global hub for digital payments and cryptocurrencies.
Speaking on the Pay360 panel, Cameron reiterated the government line that ‘it is very important that the UK have a leadership role’ in crypto and digital finance, summarising the government’s goal as being that of a ‘digital Britain’.
“The Prime Minister is someone who really gets digital technology,” she told the audience. “We want to see the cryptocurrency hub developing in the UK, a digital Britain more widely I would say.”
In her discussion with Payment Expert just after the panel, Cameron reiterated this viewpoint, adding that she – and the government – believe that this “digital Britain” goal is on the horizon.
“I think we are close,” she said. “It’s very crucial that over the next six months that we get the legislation we want over the line. We’ve had some legislation on fincomms, we’ve had the Financial Services Bill through.
“We’re doing a lot now and actually from the starting point of the APPG a couple of years ago when very few MPs were engaged with the sectors, very few members of the House of Lords, there had been on debates in parliament when we started this APPG on cryptocurrency – there’s actually quite a good level of knowledge now, we can have an informed debate now.
“I think that cross-party we really want to maximise this time period, particularly before the next election, to do as much as possible to get the legislation we need in place to give the UK a real fighting chance in terms of being that thought leader but also a place that people want to come to set up business, to engage in the sector and to have a leadership position globally.”
There is a key term Cameron mentioned here, however, that requires further examination – that being ‘cross party’. The Conservative Party is clearly hedging some bets on fintech, crypto and digital assets to give Britain’s economy a boost.
Things aren’t looking entirely rosy for the party from an electoral standpoint, however. This year is set to be an election year, and if opinion polls are anything to go by, the Conservatives aren’t projected to repeat the successes of 2015, 2017 and 2019.
Couple opinion polling with some recent by-election defeats and another by-election now due in Blackpool South following the resignation of former Conservative MP, Scott Benson, the picture isn’t looking perfect for the governing party. Can the same be said of its digital ambitions?
Labour has mapped out its own fintech policies, with a particular focus on Open Banking and AI, but crypto was not focused on extensively in the opposition’s policy document published earlier this year.
Cameron asserts that cross-party collaboration on the issue, at least in the APPG, has been positive – all APPGs are a cross-party effort after all, regardless of who sits in Downing Street. However, she did not remain unconcerned about the impact an election could have on her APPG’s goals.
“I think that we’ve got good cross-party collaboration in the work that we’re doing. I think the risk in my mind is, with it being an election year. I feel that the Prime Minister is a real champion of AI, of technology and digitalisation and he understands that it’s actually his background and you know, his thing.
“I worry that in any new government, if that should not happen, that it might not be as high up in the priority list as I would like to see it and therefore MiCA might come into play, the EU will have a first mover advantage and that the UK could fall behind.
“So the work I’m doing is absolutely crucially cross-party to make sure that we work together for the UK and for and that promise to the next generation of digital Britain.”
Crypto and digital assets fall not just under the UK’s economic vision but also its geopolitical one, Cameron added. The global crypto asset market has become vast, to the tune of over $2trn, and state actors are increasingly taking notice.
Against a backdrop of international instability and rising geopolitical tensions, the UK may want to keep itself ahead in more ways than one, including in cultivation of financial technologies.
Sino-UK relations, for instance, have been deteriorating, amplified when China was accused of being behind cyber security attacks against UK MPs, and although the duo remain key export markets for each other, competition is still high.
Regarding digital finance, China is moving forward with its own regulation and adoption of cryptocurrencies, such as a digital yuan Central Bank Digital Currency (CBDC). The UK should move forward too, Cameron argues.
“Geopolitically, it’s important that China has moved ahead quite rapidly with its central bank digital currency and the West also has options,” she continued.
“I’m also very interested because I’ve had some engagement with Commonwealth countries as to looking at a Commonwealth pound-type outcome – that might not be the name of it, but something that can really be inclusive of the whole Commonwealth actually, because I think the UK has a very special place within that.”
Foreign policy is a topic high on many people’s minds right now – tensions with Russia are at an all-time high amid the Ukraine War, the Middle East again is again in crisis, and now accusations of Chinese interference in the UK.
Economics is also a hot topic, with the UK having entered a mild recession late last year and inflation remaining high, although it has recently fallen to 3.4%, inching closer to the Bank of England’s 2% target. The government will have to sell its case to the UK public that the tech sector is an economic remedy to these issues.
“We’re really harnessing the potential of this digital revolution.”
Lisa Cameron MP
Cryptocurrency and blockchain are complex topics, and whilst some tech-savvy people, particularly as Cameron observed in younger generations, may be more switched on this does not mean that trust is high, especially given high-profile scandals involving the likes of Binance and FTX.
“I think we do need generally to have more financial inclusion and financial education from an early age as well, but then I am also heartened by the fact that our worlds are very technological.
“I use a mobile telephone. I don’t quite know exactly how it all works behind the scenes, but I can utilise it, and that’s why I think the use cases are going to be crucial and change people’s lives.
“What I want to see is that we have a real boost in skills and schools and further education establishments, so that we can harness the talent that we have in the UK to drive forward this sector because I want to see the innovations happening here.
“I want to see people coming from around the world because we have a leadership position. We’re really harnessing the potential of this digital revolution.”
Whether securing the UK a podium spot in global crypto or working towards a digital Commonwealth currency – perhaps similar to the EU’s proposed digital euro – the Conservative Party clearly has the digital economy on its mind.
The challenge it faces is whether a change of government hits the brakes on this and a, theoretically, Labour administration – which has its own policies and ambitions for crypto, Open Banking and AI – is ushered in instead after a 14 year absence from Downing Street.
