The City is a national asset with massive potential to address regional inequality
One of the hardest parts of the lord mayor’s job is getting people to think of the financial City as more than just London.
Our capital is certainly a vital part of the UK’s offer, but so are the many smaller towns and cities that lie beyond the M25 that, together, provide two thirds of the UK’s 2.2m financial and professional services jobs. That’s why I intend to spend my year in office travelling extensively outside London, visiting the sector’s alternative hotspots.
A programme of travel has already taken shape. It will allow me to see first-hand what Leeds is doing to promote itself as a major law and fintech centre, how Edinburgh is solidifying its role as the home of many major banks, and how Birmingham is looking to tempt new startups to the Midlands. All this is of particular interest to me because I was born and raised in Blackpool, which, like many coastal towns, could do with attracting more cutting-edge business.
But it can be hard to challenge the assumption that the City is just London. Just look at this very newspaper last Tuesday, when Morning Wire’s front page read simply “£71,400,000,000”. This was the tax contribution of the financial services sector for the last financial year, calculated by Canada Corporation. However, accompanying this headline was a picture of the Square Mile’s skyline – the Gherkin, Walkie Talkie and Cheesegrater, all standing tall.
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Those are three brilliant and recognisable buildings, and of course London does contribute hugely to the total tax take. But it doesn’t contribute all of it. That £71.4bn was the result of sustained sectoral growth across the UK, from Cardiff to Cumbria.
And as Jane Ellison, financial secretary to the Treasury, said at the launch of this report last week, it is important to remember that, just as different UK regions contribute to a healthy financial and professional services sector, so they feel the benefits of a strong sector. Indeed, those benefits are vital to prosperity across the country.
She highlighted some excellent examples. In the North East, the financial sector adds around £2bn to the local economy every year and employs 26,000 people. In Scotland, the sector supports 85,000 jobs, while in the North West, the figure is 98,000.
That’s good. But it’s also not good enough. Clearly London’s financial growth has outstripped many other regions over recent years. The Bank of England’s chief economist Andrew Haldane commented that the UK is towards the bottom of the league table within Europe in terms of its degree of regional economic difference. On top of this, and as argued by many commentators before and after the EU referendum, many communities feel disenfranchised by globalisation, rather than enriched by it. Undeniably, there is more to do.
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The first step is to see the City as a national asset, rather than just London’s. We should also look beyond the top line figure of £71.4bn – important though it is – and recognise the City’s massive potential to address regional inequality and create jobs and growth across the nation. This is a positive ambition for a positive City, and it is my pleasure, as lord mayor, to help publicise it.