Corbyn has to learn the City’s value to Britain
PARTY conference season is in f ull swing and this week the spotlight i s on Brighton f or Labour’s gathering.
With new leader Jeremy Corbyn and a newly appointed Shadow Cabinet, the next few months will see the party develop its policies on critical issues such as Europe, t he economy, infrastructure and regulation.
What these say about how the Labour Party sees the need to create jobs and grow the economy, and how this might impact on the UK’s global attractiveness, will be closely studied.
Like many others from across the business spectrum, we recognise the need to engage with the Opposition when it develops its policy positions. Critically, what we want to ensure is that the significant contribution the industry makes to the UK economy is fully recognised and understood.
This isn’t just about taxes paid, it’s also about the industry’s ability to create high-value jobs right across this country. Put simply, financial services plays a vital role in underpinning sustained economic growth.
For many, any reference to financial and related professional services brings to mind ‘the City’. And rightly so; just last week, London was ranked the world’s number one global financial centre, leapfrogging New York. But, in reality, financial and related professional services is about far more than the Square Mile or even London as a whole.
Two thirds of its 2.1million employees work outside the M25. What’s more, the average economic output per each of those workers is more than £85,000 per year, compared to the £50,000 UK average. The industry also makes a substantial contribution to the public coffers. UK financial services contributed £66bn in tax revenue in 2013/14, accounting for 12pc of total UK tax receipts.
Major firms from around the world are drawn to London because it remains the leading international financial centre and a gateway to the European single market of 500 million people.
In addition to being a core part of their international strategies, they are also attracted by the UK’s thriv- ing regional centres. Firms around the world know they can come here to raise finance, receive advice from world- class l awyers and consultancy firms and also cost- effectively expand right across the UK.
A strong and healthy financial services industry brings benefits and enables growth across the whole economy. Sectors such as banking, insurance, fund management, accountancy and legal services allow people to borrow, buy, insure and invest. They also provide essential support for other industries and companies, large and small, all of whom depend on financial services for capital to invest and grow.
Increasingly, the options for corporates to access capital are diversifying. As well as traditional bank finance, alternative finance, such as venture capital, crowd-funding and peer-topeer lending, are becoming more accessible.
This is something we hope the European Commission’s Capital Markets Union initiative will further bolster, to open up the market and allow for cheaper and faster access to capital.
Deeper, more liquid capital markets are not just good for the economy and investors, they are also good for you and me.
OURS is an industry that has engaged with policymakers of all hues over the years and throughout economic ups and downs.
In the past few years we’ve seen financial and related professional services at the heart of issues as diverse as forging a transatlantic marketplace and supporting the Chancellor’s work to bolster economic ties with China, to developing major regional initiatives to bring back jobs to the UK.
Regardless of their views, this is why it is so important to engage with all party leaders – to inform policymaking that boosts the i ndustry’s i nternational attractiveness.
When our industry does well, the UK does well. Intelligent policies that enable the City to thrive and ensure the industry is not put at risk will remain at the heart of our discussions with politicians of all parties.