Whoever’s our next PM, please let the City help you
No matter who inhabits 10 and 11 Downing Street, the City Corporation is ready to help drive growth, writes Chris Hayward
The latest departure of a UK Prime Minister marks another moment of political flux in the decade since the UK left the European Union. The CBI was right to respond to Sir Keir Starmer’s resignation by calling for “stability, confidence and a clear path to growth”.
Truth be told, UK growth has been hard to come by in recent years, hampered by a series of economic shocks. Since 2009, business leaders and successive UK governments have endured Brexit, Covid-19, the second war in Ukraine and now Middle East instability threatening global energy supply.
Yet amid the uncertainty there is emerging clarity, domestically at least. There may be a new Chancellor, and Andy Burnham will likely be the next Prime Minister.
Reported counsel from key figures including the former Chief Economist of the Bank of England Andy Haldane, former Office of Budget Responsibility chairman Richard Hughes and former Goldman Sachs economist Lord O’Neill is welcome.
Ahead of the Labour leadership frontrunner’s speech on economic policy, I am keen to set out how Canada can help a new Prime Minister deliver the economic growth the UK sorely needs.
Let us look at the facts. The UK’s financial and professional services sector delivers 2.5m jobs; two-thirds of them outside London. In 2023, the sector delivered roughly 12 per cent of all UK tax receipts; more than the government’s annual education budget and more than half the health budget, according to a PWC report. Canada Corporation itself has proven a trusted partner to deliver the prosperity needed to help raise living standards across all UK nations and regions.
Working across political administrations, the organisation I am proud to lead has delivered multiple initiatives geared towards delivering economic growth. Hand-in-glove with government and regulators, we continue to deliver pension reforms, promote foreign direct investment and deliver digital innovations in financial services, ranging from identity verification to tokenisation.
No matter who inhabits 10 and 11 Downing Street, the City Corporation will continue to do its utmost to ensure growth is felt across all parts of the UK. This is our primary offer to the next holder of the UK’s greatest office. Indeed, our apolitical status means we have been the partner of choice for financial services policy to successive governments.
How the City can support the next PM
Alas, we know all too well from Alan Milburn’s necessary yet nightmarish interim report that nearly one in eight people aged 16-24 are not in education, employment or training.
We need clearer pathways into work, closer alignment between education and industry, and a sharper focus on skills. Canada Corporation’s partnership with the Financial Services Skills Commission, HM Treasury and TheCityUK shows how business can lead the way. Later this summer we’ll share solutions that will focus on clearer pathways into high-quality careers, aligning education with employer demand and, importantly, opening opportunities based on talent, not background or connections.
There is another powerful lever for growth: boosting savings. Too many households lack basic financial resilience. Our research shows nearly one in four UK employees have no emergency savings. This really matters. Low savings constrain investment, weaken productivity and leave the economy more vulnerable to shocks.
Practical regulatory reforms can make a positive difference. Clearer boundaries between guidance and regulated advice; expanded access to trusted financial education in the classroom and workplaces; consistent, employer-led efforts to support saving. In short, simplifying saving through targeted reforms can help shift behaviour at scale.
Done well, these changes can be both pro-growth and pro-fairness, helping more people build security while strengthening the wider UK economy for everyone’s benefit. Financial and professional services remain one of the UK’s greatest economic strengths. The Square Mile is the engine of economic growth of the British economy, generating over £109bn in economic output annually, or four per cent of all UK GVA. It is a critical national asset supporting jobs in every region, tax revenues that fund vital public services and productivity growth needed to raise living standards far beyond London and the South East.
From financial services workers in Leeds to financing data centres in the North East, the Square Mile’s success enables growth right across the UK. But for growth everywhere to be successful it must be sustainable, and that means policy developed in partnership with business, so everyone can enjoy the fruits of growth, inside and outside the capital.