Miles Celic is the Chief Executive Officer for TheCityUK.
Whatever the colour and shape of the government that comes into office on the morning of 5 July, one thing is unarguable: without robust economic growth, they’ll be doomed to fail.
And that economic growth will be hard to deliver without harnessing what remains a world-class, unambiguous British success story: our financial and related professional services ecosystem.
Our industry is a strategic national asset that is the envy of allies and adversaries alike. It employs over 2.4 million people – two-thirds of whom are based outside London – contributing 12 per cent of the UK’s total economic output and paying more corporation tax than any other sector. It is the country’s largest net exporter and the largest net exporter of its kind anywhere in the world.
It also plays a central role in financing innovation and emerging businesses, driving regional economic growth, delivering critical infrastructure, and supporting people in their everyday lives.
In recent years, the UK has suffered the impacts of a global health pandemic, a cost-of-living crisis exacerbated by Russia’s brutal aggression in Ukraine, increasing geopolitical tensions, and political turbulence.
Some of these shocks have impacted the country’s image as a stable investment destination. Together, they underline the urgency and vital need for a sharpened focus on bolstering Britain’s global competitiveness.
The current Government recognised the need to ensure that the British regulators and regulatory environment is up to this challenge.
The Financial Services and Markets Act 2023 introduced a new secondary objective for the financial regulators on growth and international competitiveness to support the medium-to-long term growth of the economy. Equally, the Edinburgh and Mansion House Reforms recognised the role our industry can play as a catalyst for domestic investment.
These were well-supported across parliament and their implementation remains a major focus for industry.
For the next government, growth and investment remain major challenges. But it can build on the recent progress made to restore investor confidence in the UK by fostering an investment-friendly climate that is both competitive and stable.
Building a stronger investment culture remains crucial, with policies and regulations delivering the right balance of risk and growth considerations. Revitalising British capital markets, and making equity investment more appealing to a wider portion of society, will also bring benefits for both corporate Britain and individuals, ultimately helping to boost income in retirement.
Institutional and individual investors need predictability and stability, factors that have previously been at the heart of British economic policy – and must be maintained and enhanced.
To deliver these, the next government must work closely with industry and the regulators to implement a stable and predictable regulatory and tax regime that reassures investors and encourages them to commit to long-term investments in the UK. This must involve strong support for legal services, a sector which not only contributes significantly to the British economy itself, but also underpins our globally renowned reputation for justice and rule of law.
An ambitious investment-attraction strategy is much needed, with particular emphasis on attracting investment for innovation in strategic sectors such as green infrastructure, life sciences, and digital technologies.
By ensuring the various arms of government are coordinated in promoting these high growth areas, the UK can enhance its competitive edge and generate sustainable growth; for areas such as green investment, it will be critical to ensure that vital projects receive timely planning approval and are connected to the energy grid within commercially viable timeframes.
It is also essential that this revitalised growth is spread across the UK’s regions and nations. Prioritising devolution will enable regional leaders the ability to tailor their own economic development strategies to drive local growth.
Boosting growth through foreign investment and trade should also be a major focus for driving growth. Given the UK’s strength in services generally, and in particular financial and related professional services, this should be a more prominent part of the next government’s trade agenda. The UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), is, for example, a major achievement that will pay impressive dividends in the years ahead.
But, with protectionism on the rise across the globe, innovative ways will need to be found, beyond traditional trade agreements, to address the barriers we face, from transferring data to navigating regulatory fragmentation.
Closer to home, the next government should continue to build on the post-Windsor Framework thaw in relations with the EU and seek to maximise the opportunities of the 2026 review of the EU-UK Trade and Cooperation Agreement.
Lastly, the government must seize the commercial opportunities of the Net Zero transition. Building on the government’s Green Finance Strategy of March 2023, efforts should be accelerated to position the UK as the world’s first net-zero-aligned financial centre.
A clear, long-term policy and delivery roadmap should be developed to establish Britain as a global leader in clean and renewable energy, and the next government must send policy and market signals to attract green investment, ensuring that vital projects receive speedy planning approval and connect to the energy grid within a commercially viable timeframe to facilitating a smooth transition.
To deliver these benefits, the industry and the government will need to work together with shared purpose and common ambition. We will need to ensure that regulators are encouraged and empowered to match the growth mindset that marks out the most successful of their international counterparts.
With this shared goal, our industry can make an even stronger contribution to supporting Britain’s prosperity and supercharging growth across the country.
