While the grip of the economic downturn has remained firm, the government has had to focus on slowing spending growth to reduce the deficit. But the outlook is not entirely gloomy.
It was encouraging to hear business secretary Vince Cable reiterate his commitment to putting growth and job creation at the centre of government policy at the Trade and Industry dinner at the Mansion House, a fortnight ago.
For centuries, the City has been at the heart of funding for international trade and today it continues to fulfil that role, as a servant of the global business community.
We must not forget these deep roots. From the medieval Stocks Market to the modern Stock Exchange, from coffee-houses to commodity derivatives – the private sector has always played an essential part in generating the investment, jobs and wealth needed to sustain the economy when public expenditure is under pressure.
At present, the UK’s financial services industry contributes an enormous amount to the UK, bringing in tax receipts to the tune of £63bn in the 2010/11 tax year, and generating £115.2bn for the economy – constituting 9 per cent of economic output in 2010. Currently, the financial services sector in the UK employs over 1m people, with 315,000 jobs located in the City of London.
Sustainable job creation is the key to getting us on the road to economic recovery, and so we must embrace our role as an international business leader and take the City’s offering to the rest of the world.
Only last Thursday, the City of London celebrated the 10th anniversary of its City Programme, which since 2002 has been bringing young practitioners, regulators, central bankers and policy-makers from the more recent EU member states into London for attachments to companies and public bodies. The event was chaired by Miroslaw Kachniewski, president of the management board at Poland’s SEG.
The EU is a significant market, but the City has yet broader horizons. It is predicted that over the next five years, emerging economies will account for more than half of global growth, and will act both as generators and consumers of capital. This is why I will travel widely throughout my time in office, to forge, reinforce and, importantly, renew partnerships with centres of trade and industry all over the world.
Whatever the future brings, we can be sure of one thing: that UK business will stand tall. Time and time again, London has shown impressive resilience despite economic downturns, and has acted as a shock-absorber – not only for our partners across the UK, but also for Europe itself.
The rich history and culture of the United Kingdom owes much to the industriousness of its people and the careful cultivation of trade links. Reinforcing these links will be essential in ensuring that the next chapter, for both the UK and the wider world economy, proves a prosperous one.
David Wootton is Lord Mayor of the City of London.