Chief Executive's Insight - March 2016

With less than 100 days to go until the referendum on the UK’s membership of the EU, TheCityUK has continued its focus on contributing to the reform debate and reinforcing the importance of access to the Single Market. An important highlight in our programme for the weeks ahead will be welcoming Lord Hill to our Advisory Council meeting on the 6 April to give us a senior view from the European Commission on the major policy issues he is pursuing under his portfolio.

Earlier this month, we launched our latest report: A practitioner’s guide to Brexit – exploring its consequences and alternatives to EU membership. The report, which discusses the practical implications of a potential Brexit and the questions members should consider as part of their strategic and contingency planning, was reported in the likes of the Financial Times, The Telegraph and Reuters and stimulated a lively panel discussion, chaired by Anthony Hilton at the event. We also welcomed keynote speeches from the Rt Hon David Lidington MP, Minister of State for Europe and Margriet Leemhuis, Deputy Dutch Ambassador to the UK.

Our EU programme continues at pace over the coming months, with roundtable events with the Rt Hon Ken Clarke MP, Jacob Rees-Mogg MP and Graham Brady MP. Through these events we will hear from policymakers on both sides of the debate and continue to use the practitioner’s guide and our previously published reports on the UK’s EU membership, to ensure our industry views are heard in the debate.

We were also recently in Brussels to launch the latest report from the International Regulatory Strategy Group (IRSG): Retail financial services: bringing real benefits to Europe’s customers. The report considers how new technologies, business models and market entrants are disrupting the way in which retail financial services firms are interacting with their customers. It also refers to the service offered by the likes of Uber and Amazon, who use technology to meet and often exceed customer expectations and are raising the bar for financial services. By embracing new technology and breaking down barriers between countries across Europe, the Single Market in Retail Financial Services can become even more successful, making it easier for businesses to offer – and customers to choose – products and services without being restricted by national borders.

In line with our international programme, I am delighted to have been asked by HM Treasury to lead the Financial Services Trade and Investment Board (FSTIB) work on India. FSTIB is the cross-government and industry body tasked with strengthening Britain’s position as the centre of global finance. Leading the India workstream means that our work and priorities will be at the very heart of the UK government’s activity for the industry. We are pleased to continue supporting the India-UK Financial Partnership (IUKFP) in its delivery of new recommendations on areas such as financial inclusion, re-insurance and rupee internationalisation, and look to develop new opportunities for UK-India collaboration in FinTech and green finance. TheCityUK has also been asked to support the China and FinTech workstreams. I am also pleased to note that a US-focused FSTIB workstream, which will be led by John McFarlane, will build on our existing US programme.

Next week I will be visiting New York and Boston for meetings with member firms and leading figures in the financial and related professional services industry. This takes forward our strategy to deepen relationships with stateside policymakers, influencers and member businesses. This trip will also form part of our work to develop the Market Advisory Group for the US, reflecting both the importance of the US itself and related work across a wide-range of international issues.

Whilst in New York, I will also be joining the Harvard Law School Europe-US Symposium on Building the Financial System of the 21st Century. As part of the symposium, I have provided a Concept Paper on the divergence between US and EU regulations. TheCityUK has a long-standing interest in addressing transatlantic regulatory divergence and its opportunity costs. We remain strongly supportive of the efforts being made in the US and the EU towards a successful conclusion of the Transatlantic Trade & Investment Partnership (TTIP). We believe TTIP should be comprehensive, ambitious and that negotiations towards it should cover all aspects of the transatlantic economy, and that nothing should be excluded from discussion - including regulatory coherence.

At home, the Chancellor of the Exchequer announced his Budget earlier this month. Our response welcomed his commitment to lower corporation tax to 17% by April 2020 – the most competitive tax rate of any G20 country – and the introduction of a simplified Business Tax Road Map truly shows the rest of the world that the UK is open for business. The Chancellor's commitment to spending more on infrastructure projects right across the UK is also essential to ensuring future job creation and spurring long-term economic growth. As noted in our Budget representation, providing investors and consumers with certainty; increasing the Government’s own capacity to deliver projects; and finding effective ways to attract and maintain new sources of finance are all essential to ensure a strong infrastructure pipeline. The creation of the National Infrastructure Commission and the acceptance of its first three recommendations shows that this part of the system is off to a positive start.

As part of our regional programme, we have been partnering with UKTI on the launch of UK Financial Centres of Excellence, promoting the contribution cities and regions around the UK are making to our industry. These events continue in Manchester on 28 April to launch the North West as a Financial Service Centre of Excellence - a centre that employs 233,000 people in financial and related professional services, Harriett Baldwin MP, Economic Secretary to the Treasury, will deliver the keynote address and the event will discuss government policy relating to the region and plans to develop the Northern Powerhouse. We will continue this programme in May, to launch Northern Ireland and the Midlands as Financial Services Centres of Excellence, in Belfast on 12 May, and in Birmingham on 13 May respectively. For more information on these events please get in touch.