John McFarlane - Speech to TheCityUK National Conference 2018

John McFarlane, Chairman, TheCityUK, speech to TheCItyUK National Conference 2018 on Thursday 22 November 2018.

This is TheCityUK’s second National Conference and I’m delighted we have chosen Birmingham this year. So welcome everyone and thank you all for joining us.

And a special thank you to CYBG for partnering with us for today’s event, to EY for their support, and to all our exhibitors. Please do take some time to visit their stands during the breaks.

Birmingham is a wonderful place where I spent a great deal of time in my industrial years. It is a thriving centre for our industry beyond London given the significant investment from global firms here in recent years.

The city is home to the UK headquarters of HSBC, a major centre for a number of financial institutions including Deutsche Bank, DLA Piper, Eversheds Sutherland, EY, and of course my own bank Barclays to name but a few.

All have been drawn by the city’s proud traditions of industry, entrepreneurship and innovation and its focus on growth and regeneration.

TheCityUK was set up to represent our industry – banking, insurance, investment management, as well as related professional services including accounting, legal and consulting.

The sector is a national asset. Our purpose is:

  • to champion the financial and related professional services industry across the UK
  • to promote its role as Europe’s financial centre – which will continue whatever happens with Brexit
  • and to advance its globally-leading position as a premier international financial centre.

What is particularly important is our role in promoting the value and contribution of this industry right across the regions and nations of this country.

This is something I have personally been very committed to during my tenure as Chairman and the banner is now being carried by our seven City Chairs.

It is a misconception that we are all about ‘the City’. Of course, London is unquestionably the country’s largest financial centre.

But it is also a fact that the majority of people working in financial and related professional services are based in thriving financial hubs outside the M25.

In cities such as Birmingham, Belfast, Manchester, Leeds, Bristol, Cardiff, Newcastle and Edinburgh.

These are critical centres with enormous potential for driving the future growth in our industry.

This is one of the reasons I’m so pleased to be here today. Birmingham’s strong pool of graduate talent, its connectivity and its power to focus on critical regional issues are at the heart of its growth potential.

And of course, this city has strong industry links going back hundreds of years as the birthplace of two of this country’s largest banks: Lloyds and Midland bank– now HSBC.

When we look to the future, people – not Brexit – is the number one priority for the sector.

Our ability to attract and retain the best entrepreneurial digital and financial talent stands at the heart of our competitive advantage.

It is therefore vital that the UK remains open and encourages the development of home-grown talent and welcomes international talent.

This is a critical issue for the industry across the country, especially in those cities where our industry’s employment growth is outpacing London.

In recognition of its importance, the Chancellor last year asked TheCityUK to convene a Financial Services Skills Taskforce, chaired by a former government minister and our board director Mark Hoban, to ensure the sector has the skills it needs to remain globally competitive.

This seeks to ensure and enhance diversity in all areas, to address critical skills shortages across the regions and nations, to ensure the right digital skills are being developed, and to offer retraining throughout an employee’s career.

While our focus is largely on the opportunities for our sector there are of course a number of challenges.

Of these, Brexit has, not surprisingly, taken centre stage. Of course, the issue of Brexit, the shape of the final deal and its impact on the UK and EU economy, remains a very significant concern.

While the politics have been front and centre, ultimately the focus now needs to move to securing an agreement, so we can move on to the next stage.

In this respect, it is good to see that that the needs and importance of our sector has been acknowledged and included in the political declaration and that these have been hardwired into the future negotiations.

TheCityUK has made a real difference here:

  • We have ensured services as well as goods remain on the agenda
  • we conceived and had recognised the need for a transition period to avoid unnecessary dislocation and to allow firms to handle the change is an orderly and economic way.
  • we secured an agreement that the EU will continue to use UK derivative clearing systems for a period and hopefully forever
  • and enabled European branches to retain branches rather than convert to subsidiaries.

Of course, there is still much to be done, and we appreciate the need for compromise to get to this point.

This declaration is infinitely better than the severe and unpredictable damage that would be delivered by a no deal outcome on the economy as well as on the sector, and this has now been recognised.

I am sure these and many other issues relating to the future growth of our industry will be well discussed today.

All is left for me to do is to you thank you all for coming along, and to encourage you to ask questions of our speakers.

It is now my pleasure to hand over to Sandra Wallace – our City Chair for Birmingham and Joint Managing Director Europe and the Middle East, DLA Piper – who is chairing our first panel session.