Nearly 30 years of working in the City has taught me that successful times are the most dangerous times. Warren Buffett, in one of his recent newsletters, described the warning signs that see good times turn to bad as the ABC of business: arrogance, bureaucracy and complacency. Today, there is no room for complacency.
The City has been one of the UK’s most remarkable success stories since the industrial revolution. Finance and professional services are responsible for 15 per cent of employment in London, or nearly 700,000 people. Financial and insurance services contributed £126.9bn in gross value added in 2014. The Global Financial Centres Index, meanwhile, shows the City neck and neck with New York as the most competitive place for financial and professional services in the world.
I believe we are at an important moment for the City. Strong leadership is required from government and City leaders to ensure that we move ahead of New York as the global capital of capital markets and build for the next generation.
The City could be likened to a quality wrist watch. To make it run smoothly, many intricate parts need to come together in perfect harmony. At the Mansion House today, in front of the lord mayor, I will outline five key cogs in the wheels which will, in time, ensure the future success of the City: we need the right skills; we need a competitive tax regime; we need the right regulatory oversight; we need the best technology and the best digital culture; and we need the right access and relationships with global markets.
We need the right people to be available in the right numbers and with the right skills for today and tomorrow. This means a far more joined-up approach between business, government and the education sector.
A simplified and competitive tax regime is required. That will keep the City competitive in a global context.
At a time of such change in the regulation of our banks and other financial institutions, we need the right combination of checks and balances, and the freedom to take considered entrepreneurial risks which create wealth, generate more taxes for public services, and which lead to more investment and more jobs.
If we don’t have the very best innovation and delivery of technology, we will fall behind our global competitors. We must prioritise digital skills and technology, and change our mindset in the City to ensure we achieve this.
We need the right outcome to the current debate on Europe, and we must improve the way the City does business with Asia, the US and the emerging markets of Africa and South America.
The City sees our finance sector and our professional services combine to create one area of the UK economy in which we are genuinely the best in the world.
Today, I issue a clarion call to politicians and business leaders to ensure that we build on the success of the City, for the benefit of the next generation and of the wider UK economy.
Over the next five years, we must act together in a way that we haven’t done before.