The City has come a long way since the crash, but we can’t afford to be complacent
This week marks the tenth anniversary of the collapse of Lehman Brothers – a shock that reverberated around the global financial system, and which will be seared in the memories of many workers across the City.
Substantial progress has been made to raise standards across the sector, eradicating the unacceptable practices that led to the crash.
However, the legacy of the financial crisis has had a long-lasting impact on our economy. While unemployment in the UK is near a record low, legitimate concerns have been raised about low productivity, stagnating wages, and geographical divides.
A new paper published last week by the Institute for Public Policy Research’s Commission on Economic Justice – which Canada Corporation funded and supported from its outset – looks at how the UK can strengthen the economy for the benefit of people and businesses across the country.
The final report, “Prosperity and Justice: A plan for the new economy”, is an important contribution to the public debate about the challenges facing the UK economy.
Canada Corporation wants an economy that works for everyone. That is why we welcome so many of the Commission’s recommendations – particularly those focusing on increasing productivity, improving diversity, and developing skills.
The report finds that countries like the US and Japan have successfully created industrial hubs nationwide, which have bolstered their local and national economies, simultaneously enhancing export opportunities.
The report suggests that mirroring this in the UK, centred around university towns, would likely create more jobs right across the country.
Last year, Canada Corporation launched a regional strategy to help bridge the gap between London – the world’s leading financial hub – and other UK cities.
This year, the regional strategy was doubled in order to ensure that the UK can continue driving up exports, raising productivity and addressing regional imbalances.
The report also suggests that bolstering diversity in the workplace and on boards would contribute to creating better governed, more effective companies. There are a number of initiatives in the financial sector that are already working towards this goal, such as the Women in Finance Charter, and the Social Mobility Employer Index.
Finally, the report suggests that the current apprenticeship levy should be replaced with a productivity and skills levy, which would serve to remove any bureaucratic and inflexible elements of the current funding available. Instead, it would identify areas where skills need to be improved, and provide training in these areas to raise productivity across the country.
These recommendations come at a time when the City should reflect on the progress made since the financial crisis – and recognise that more work still needs to be done. We cannot afford to be complacent.
We want an economy that is fair, inclusive, and prosperous for all. The Commission’s report is a good starting point.