Government reforms should not damage City

THIS election campaign was one of the most keenly contested and significant – both for the City and the UK – in recent generations. At the time of writing the composition of the next government is uncertain, but the issues affecting the economy and financial services industry remain far more clear cut.

I hope the parties can come together quickly and form an effective government, one that is ready to get down to day-to-day business and engage with the City. I look forward to working with whoever forms the next government.

Undoubtedly tough decisions will have to be made. A painful fiscal readjustment is needed over the coming years to retain the confidence of international investors and markets.

The UK-based financial services sector is ready to pay its fair share when it comes to reducing the budget deficit. Indeed the industry already makes a large contribution, generating £61.4bn, equivalent to approximately 75 per cent of the education budget, of total tax revenues in 2008/09.

That is why we must make sure any changes to the regulatory or tax system do not undermine an area of economic activity in which the UK is world leading – and employs over one million people.

Reforms such as the proposed bank levy must be implemented on the basis of some kind of international consensus; acting outside of the G20 process risks damaging our competitive position.

Of course, a large proportion of the regulation affecting the City today stems from Brussels rather than Westminster. London is the financial capital of Europe and therefore protectionist or anti-competitive legislation will ultimately benefit nobody. That is why we need closer and earlier government engagement with the EU's decision-making bodies.

The UK is home to over 250 foreign banks and the London Stock Exchange has more overseas companies than any other rival platform. This shows how successful the City can be at attracting internationally mobile individuals and institutions to our existing cluster when competing on a level playing field.

So I hope, now that the election rhetoric has died down, we can hold a calm, considered dialogue with policy makers over the future of UK financial services.

A successful City can provide the lending needed by businesses and individuals to drive the UK economic recovery forward. Let us work together to achieve this outcome.

Nick Anstee is Lord Mayor of the City of London