The chancellor’s press conference last week reassured the markets in a volatile period. He said that the UK economy faces these fresh economic challenges from a “position of strength.”
This is a point I have reiterated many times over the past few days, when visiting the economic hubs of Dallas and Chicago. The most frequently asked question was “What next?” My response was that Article 50 had not been invoked and that, even once initiated, there would be a further minimum two year period where the UK will remain within the EU.
There are many questions, many unknowns, and not enough answers – something that no business likes to see. But I consistently made the point that we in the UK need to maintain our global momentum in trade, and to grow our goods and services exports. The rest of the world won’t stop as the UK goes through this period of uncertainty.
That is why it is essential that the government does everything in its power to limit uncertainty. It must act swiftly to reassure businesses – in the UK and overseas – in order to ensure continued investment in our country.
I will be making this point on my next business visits – in particular to key Asian markets such as China, Japan, Korea and Taiwan. We will be listening to foreign financial and professional services firms who are either currently or planning to invest in the UK, and relaying any concerns they may have to government. It is of paramount importance that we maintain the right environment for international business, and indeed enhance it over time. I want to reassure our global partners that the UK is pulling out all the stops to remain the number one global financial centre.
In order to achieve this, the City has two key asks. First, we must retain access to the Single Market. Financial services need to have passporting rights in order to sell into the continent, and we must not forget that financial services are the UK’s biggest export by an extremely long chalk. Second, we must maintain our reputation for openness and internationalism, and must continue to be attractive to the best talent from around the world. Pulling up the drawbridge and limiting the labour market is a destructive strategy, and not one which we should drift into adopting.
There is also a further point that has gained increasing attention and momentum: greater decision-making powers for our capital. This is something that the City has advocated for a long time. Brexit has now accelerated these calls for more devolution powers and we welcome the contribution of Sadiq Khan in championing this proposal. The City wants to see more powers in areas like skills, housing, transport and infrastructure handed to London – enhancing and protecting its critical role in generating wealth for the wider UK economy.
There is no reason why London can’t maintain its position as a world leader in financial technology, foreign exchange and professional services. This is in addition to the existing strengths that play to our hand; banks, legal services firms, accountancy, insurance and asset management companies, to name but a few London-based industries that are renowned and respected across the world. Collectively, they are a towering pillar of strength in the UK economy and the City will do all it can to protect their status.