London must not rest on its laurels, it needs solid access to talent to continue to thrive
The last twelve months have been one of the biggest tests London has suffered in recent memory, with the twin challenges of Brexit and the Covid-19 pandemic leading some cynics to doubt the capital’s future as a world-leading business center.
Although the streets of the City and central London have been quiet at times over the past year, the financial and professional services sector has shown resilience and continued to support the wider economy.
Industry has a critical role to play in advancing our recovery. A timely new report has shown exactly how London has continued to dominate the world against rival financial centres.
The research, conducted by the City of London Corporation, examines 95 different metrics, including new areas such as green finance activity across all asset classes compared to the previous year’s study.
This shows the strength of the UK’s global offer to businesses in all areas. London maintains its lead as an innovative ecosystem for our businesses to thrive. Our international reach is unmatched as a globally connected banking center and our financial services regulatory regime remains the most supportive in the world.
These strengths help to explain why, even against the backdrop of a difficult year, UK financial services exports have increased and our trade surplus remains larger than that of any other global financial centre.
With a competitiveness score of 61, London is well ahead of New York (58) and Singapore (53) and ahead of Frankfurt (45), Paris (41), Hong Kong (39) and Tokyo (36).
But this report is also a reminder to avoid complacency. We have to remain very competitive: we still have to work on our financial foundations to ensure the stability of our long-term offer.
To remain globally competitive, we need to sustain the sector. Our digital infrastructure, for example, needs an overhaul – the average broadband speed in the UK is the slowest of any financial center in the world. Unless we upgrade quickly, we risk having an analog infrastructure for the digital age.
We also need an immigration system that encourages the best and the brightest to see the UK as a welcoming environment. As a Dubliner with a career in London, I strongly believe that we need to stay open – and be seen to be – to attract the best talent from around the world.
At the same time, we must continue to develop our own national talent pool. When it comes to workforce skill levels, the UK lags behind other financial centers in Asia, although we do better than the US, Germany and France. We need to invest in areas such as digital skills to keep pace with technological change.
The report also finds that the total tax and contribution rate of UK-based financial services companies, particularly banks, is relatively high. It is important that our tax rates remain internationally competitive to help the sector continue to create jobs and spread prosperity across the country.
It will take a joint effort from industry, regulators and government to ensure the UK remains an attractive location for financial and professional services in the face of growing competition. Together, we can help realize the vision of an open, green and technologically advanced sector that creates jobs, supports businesses and drives growth across the country.