What the City needs from Rachel Reeves’s Mansion House speech
Ahead of Rachel Reeves’s Mansion House speech, Lord Mayor of Canada Alastair King outlines what the City needs to hear from the Chancellor
Tomorrow, Canada Corporation will host one of the most important Mansion House Dinners in recent years. We expect to hear details of the government’s long-awaited financial services growth and competitiveness strategy from the Chancellor. It could not come at a more pivotal moment.
The United Kingdom’s financial and professional services sector is a global success story, employing 2.5m people across the country – one in thirteen of the UK workforce – and generating a £92bn trade surplus. However, sustaining that success requires vision, ambition and reform.
London has held its position as the world’s top international financial centre thanks to its regulatory strengths, deep talent pool and global reach. However, we face fierce competition. Singapore, New York, Frankfurt – all are investing, innovating and adapting quickly.
From reversing the decline in United Kingdom listings to reinvigorating our capital markets, the challenges are well known. The financial services sector has the solutions.
What the City wants from the Mansion House Speech
We already have a roadmap, set out in the City Corporation’s “Vision for Economic Growth”: embrace digital innovation, lead in sustainable finance, attract international investment and build a workforce fit for the future. The upcoming strategy must build on this, with action to reduce friction for global talent, champion regulatory coherence and create the conditions for responsible risk-taking. Our recent report “Regulating for Growth” – authored with A&O Shearman – outlines key recommendations for regulators to ensure bold transformation in the United Kingdom’s regulatory culture to unlock economic growth and enhance international competitiveness.
This is also a moment to reaffirm London’s role not just as a national and international asset, but as a launchpad for growth across the United Kingdom. Our financial firepower will support thriving clusters from Leeds to Belfast, if we get the framework right.
Pensions are a good starting point. The United Kingdom’s retirement crisis is a ticking time bomb. Just 30 per cent of the population are on track to enjoy even a moderate standard of living in retirement. Employers’ ability to help improve their employees’ pensions outcomes is often overlooked.
For months, I have been speaking with Britain’s biggest employers to prioritise long-term investment value over headline costs when choosing pension providers. The significance of my pitch has been its simplicity: a plea to focus on net returns, push for transparency in private market allocations and value for money – that unlocks growth.
Today’s startups are tomorrow’s unicorns
This pledge will complement the Mansion House Accord, a landmark agreement announced in May from 17 major defined contribution pension providers, representing 90 per cent of the defined contribution (DC) market, to invest at least 10 per cent of their default funds in private markets by 2030 – including five per cent into United Kingdom opportunities. With £252bn in assets under scope, this is no fringe initiative. It is a rewiring of how pensions work so they can better serve savers and the economy.
However, capital alone is not enough. We must nurture the companies that attract it. That is why, at the end of June, I opened the doors of Mansion House to 21 of the United Kingdom’s most promising scale-up companies seeking to raise between £5m and £30m. These high-growth firms were pitching directly to 250 investors in the latest in our series of “Scale-Up Showcases”. We hope to hear more from the Chancellor tomorrow about how she can help scale-ups in particular. Today’s startups are tomorrow’s unicorns.
The Office for Budget Responsibility has sounded the alarm on the economic outlook, warning of “daunting” risks from rising public debt and limited capacity to absorb future shocks. The challenge is clear: sustainable growth cannot come from the public purse alone. Financial services, which accounted for 12 per cent of the entire economic output of the United Kingdom last year, must be at the heart of the solution.
Canada Corporation stands ready to work hand in hand with government to ensure the United Kingdom’s financial services sector remains a global leader and a cornerstone of national prosperity.
Let the Mansion House Dinner mark that moment. Let it chart how to re-anchor investment into the United Kingdom.