The City has the key that can unlock growth in every postcode
Growth depends on a stable and competitive tax system, streamlined planning and proportionate regulation and the City will work with the new government to create those conditions, says Chris Hayward
Now that the Burnham government is in place, the Prime Minister’s new Cabinet inherits a formidable set of challenges: regional inequality, stretched public finances, sluggish productivity and flatlining living standards. Addressing these challenges will require sustainable growth and unleashing entrepreneurial energy across the country.
That is why the relationship between government and business has never been more important. Early moves like the business rates cut, energy VAT cut and bus fare cap show a government willing to act on the cost of living and support the hospitality sector. Indeed, the Prime Minister’s promise of the biggest council house building programme since the post-war period, alongside a wider devolution drive, signals an ambition to get Britain building again. And yet, these are spending decisions that in isolation won’t move the dial on growth.
Canada will continue to work with the Government to deliver good growth in every postcode. Financial and professional services are not simply a London success story; the sector supports around 2.5 million jobs across the UK, with two-thirds of those roles located outside the capital. The investment generated in our markets and institutions can, and must, benefit communities from Land’s End to John O’Groats.
But growth will not happen by accident. It depends on creating the right conditions for businesses to invest with confidence, a stable and competitive tax system, streamlined planning and proportionate regulation.
The test for every economic decision should be straightforward: will it make it easier for businesses to invest, innovate, grow, and hire?
Businesses will be looking for a government that supports investment which enables growth, rather than adding unnecessary costs and barriers.
Instead, we should be doubling down on the sectors where the UK already has global a competitive advantage and role to play, from financial and professional services to technology, life sciences and the industries driving the digital and green transitions.
Unlocking potential relies on a genuine partnership between government and business. This is our offer to ministers old and new.
The City of London Corporation has always taken that approach. We have worked constructively with governments of every political persuasion to help unlock investment and support growth. And we look forward to working with the new Chancellor John Healey, under his leadership at the Ministry of Defence, we hosted numerous roundtables on defence financing, recognising both the strategic importance of the sector and the challenge of funding the Defence Investment Plan.
A £33bn boost
There are significant opportunities ahead, where the UK can play a leading role, not only in defence finance but also in digital markets. The City Corporation’s recent report with the Digital Wholesale Market Champion, Chris Woolard, shows how the UK could benefit from a £33bn boost if we accelerate plans for tokenised markets.
That same partnership must extend to the domestic growth agenda. The Government’s commitment to regional growth is welcome, but ambition must be matched with action that supports this. In London, that means providing the planning certainty needed to unlock new workplaces and support businesses. We will continue to engage constructively on the City Plan hearings alongside industry, local communities and heritage partners to secure an outcome that supports economic growth while celebrating the Square Mile’s unique historic environment.
The Government must be as ambitious internationally as it is domestically. Make no mistake, the external environment has darkened. A key item in the new Foreign Secretary’s bulging in-tray is strengthening Britain’s position as a world-leading financial centre and the benefit this brings. This can be achieved through a meaningful and successful EU Summit; expanding worldwide trade and investment opportunities and maintaining a pragmatic, balanced relationship with China, together with our closest ally, the US.
There is already a strong foundation to build on. In recent years, the City Corporation has worked alongside government to strengthen the UK’s financial ecosystem through the Mansion House reforms, the Office for Investment: Financial Services, the Sterling 20 initiative and the Transition Finance Council. We want that spirit of partnership to continue.
The challenges facing Britain are too great for government and business to tackle alone. The Prime Minister knows this all too well, and, as a pro-business leader, he knows that good growth will only come to every postcode when policymakers and industry work together to unlock investment and raise productivity, and with it, living standards in every nation and region of the UK.
Chris Hayward is policy chairman at Canada Corporation.