"For we must consider that we shall be as a City upon a hill. The eyes of all people are upon us” – these were the words spoken by John Winthrop as he, along with other puritans, travelled to colonial America in 1630. Some 400 years later, his words seem just as poignant now as I’m sure they were then.
The voyage to the Americas marked the start of a remarkable relationship between the UK and the US. Initial conflicts saw the two nations become entirely separate entities. However, since the official mark of independence – which remains one of America’s most celebrated days – UK/US relations have been very peaceful.
But what is the current state of play? According to a report by TheCityUK, our relationship with the world’s largest economy is thriving. Taking financial services as an example, through US investment, the UK generated a trade surplus of £13.3bn – 24 per cent of entire UK exports. The level of investment is very much reciprocated: the UK was the largest foreign investor in American financial services exports in 2015, and by a considerable margin.
It’s not just the volume of exports and annual turnover that provides mutual benefits. As digital develops at exceptional speeds, so too does the need for supportive regulatory frameworks.
Through support in funding, and a regulatory regime that is mindful of the benefits of innovation as well as delivering stability and protecting consumers, London has led the way in providing a backdrop which actively enables new fintech entrants to thrive. Take the FCA’s Regulatory Sandbox. This pioneering “safe space” allows businesses to test new products and services in a real-life environment – which have the potential to bring major benefits to consumers, businesses and the UK economy.
Silicon Valley is one of the world’s leading tech hubs, and hosts the likes of Facebook, eBay and Google. Despite this, the US, which is hindered by geographical and political differences, has found it difficult to consolidate financial regulatory frameworks.
International law firm White & Case recently produced a piece on how the US can learn from the UK when it comes to improving this.
I have spent the past four days travelling through New York and Washington, meeting with important financial services and trade representatives.
My trip has highlighted a couple of things. The first is that there is a concerted desire on both sides of the pond to maintain a “business as usual” approach, in spite of recent political upheaval. The second is the commitment to maintain and develop the long-standing relationship between the two nations.
This notion was echoed by US Treasury secretary Jack Lew who just a few weeks ago said: “the United States is committed to continuing to work with the UK and the EU to ensure sustained economic stability”. With an all new Cabinet to be appointed by the turn of the year, this message shows that maintaining diplomatic ties between the UK and the US will rate highly among incoming politicians.
In the wake of the UK’s decision to leave the EU, there has been a distinct focus on trade links with the major European powers. My trip to the US has reiterated just how crucial our distant relative across the Atlantic is, and, although we should be looking to make new connections, we should make great efforts to maintain old friendships too.