When people talk about the UK financial services industry they inevitably associate it with the Square Mile. But in fact the industry is spread across the entire country.
As Lord Mayor, I take an active role in highlighting the sector’s vital contribution to the broader economy both in London and beyond. My visit to Manchester last Friday, for example, showcased how important that city’s financial and professional firms are to the UK’s global standing for international finance.
Manchester today employs nearly a quarter of a million people across the sector and is fast establishing its reputation as the European capital for lower to mid-market private equity. So Manchester and other UK financial centres should not be seen as separate from the City but rather as part of it – we share the same regulator and our businesses are intertwined.
In order to rebuild public trust, we must raise awareness among both domestic and overseas audiences of the valuable work performed across the whole UK financial industry.
That is why when I travel to the US later this week I will highlight the diverse range of skills and strengths on offer in this country. From carbon trading to PPP to Islamic finance, the UK has the expertise needed to exploit unique business opportunities in these and many other markets across the world.
The City has a long tradition of meeting the challenges of the day through new financing techniques, stretching back to before the Napoleonic Wars. Therefore we are well placed to overcome suspicion of these financing methods in the US by providing alternatives to “conventional” capital raising. The UK’s capabilities are world class and we must continue to work with our counterparts in the US, particularly the energy industry, to meet these challenges.
As long as policy makers do not undermine our competitive position through excessively punitive regulation, both countries will benefit from the ongoing exchange of talent, capital and ideas across the Atlantic.
However, with a UK general election looming and an American administration preparing to face mid terms we must ensure that regulatory reform does not become a source of political point scoring.
The industry needs certainty, clarity and consistency when it comes to new fiscal or regulatory legislation. Measures that fail to meet these criteria will only distort competition by creating an uneven playing field.
That is why the UK government’s bonus supertax or plans by the US to impose a levy on banks have the potential to cloud the business environment with dangerous uncertainty. Acting ahead of the global regulatory curve in this fashion leaves us vulnerable to a potentially disastrous talent drain, particularly with other leading G20 nations yet to follow suit.
Nick Anstee is Lord Mayor of the City of London