A Roadmap for Recovery

The following speech was given by Emma Reynolds, Managing Director, Public Affairs, Policy and Research, TheCityUK, at the launch of our Roadmap to Economic Recovery report.

We are publishing the Roadmap to Recovery report at a time of great challenge and change so I want to say something at the outset about the context of our launch today. I will then outline the overall purpose of the report, provide a flavour of some key recommendations and then set out next steps.

But I just wanted to put on record my thanks to everyone in the team at TheCityUK who have put so much work into this report and to the Financial Services Skills Commission and our members for their contribution to it.

So let me start with the context.

Nobody could have predicted what’s happened over the last 12 months. Covid 19 has provoked a public health emergency in the UK and across the world. And the economic consequences have been profound for families, communities, and businesses right across our country.

The central message of our Roadmap report is that the financial and related professional services industry is determined to be part of the solution to this economic crisis.

In the early stages of the pandemic, our industry acted as a shock absorber, delivering government-backed loans to more than 1.6 million companies at pace, offering holidays on mortgage and loan repayments ensuring markets continued to operate efficiently and providing crucial legal and professional advice to businesses and people up and down the country.

As the nation takes cautious steps to move forward out of the pandemic, our industry has again a key role to play – as an engine for recovery and growth.

Going into this crisis, financial and related professional services were already making a huge contribution to the economy as the country’s biggest taxpayer and largest exporting industry, delivering 10 percent of economic output, and employing 2.3. million people, two thirds of whom are outside London.

It is a truly national industry. Alongside London’s unique and unrivalled financial and professional services eco-system, there are strong industry hubs in cities from Belfast to Birmingham, from Cardiff to Manchester and from Leeds to Edinburgh.

So the industry is well placed to kick-start economic recovery and growth right across the country now and in the decades ahead.

Another consequence of the pandemic is that it has accelerated trends and socio-economic challenges already in train, and our Roadmap reflects on these:

  • the international slide towards protectionism and isolationism.
  • regional disparities of wealth, investment and opportunity.
  • the need for greater diversity, inclusion.
  • the urgency of climate change and rapid technological transformation.

In some cases, these trends provide opportunities which the industry can help the country to capitalise on: whether it’s the revolution in working patterns, the incredible digital transformation we’ve seen or the renewed impetus to tackling the climate emergency.

In light of these challenges and opportunities, the Roadmap sets out recommendations across a broad range of areas:

From international trade to changes in regulation and tax, from innovation and technology to the crucial role of professional services alongside financial services.

I will give a flavour of some of our recommendations in three key areas: levelling-up, skills and talent and sustainability.

To support the Levelling-up agenda:

The industry already makes a huge contribution, with highly skilled and well paid jobs across the UK. Only this week Goldman Sachs announced new investment in Birmingham, Barclays is opening new offices in Glasgow later this year and PWC recently opened a prestigious new office in Manchester’s financial district.

And we already see our industry collaborating with key partners such as universities to provide training opportunities for local people.

The industry also underpins vital investment across the economy.

The roadmap sets out how the industry, working with TheCityUK City Chairs and regional networks of practitioners around the country, should build on its current work in helping local leaders to shape their recovery strategies.

In the report we call on government to prioritise and support ultrafast broadband across the UK. We are also calling on the government to appoint a Cabinet level Minister to lead a team responsible for defining, measuring and delivering the levelling up agenda across government

Secondly, on skills and talent:
We recommend a greater focus on upskilling and reskilling our current workforce in key areas to ensure the industry has the skills it needs for the future.

We also recommend that our industry doubles down on commitments to youth and mentoring schemes.

And we must ensure that the government’s investment in skills and training aligns with the needs of business.

Crucially, we stress that more needs to be done to ensure that our industry is more representative of the people and communities that it serves and building on the excellent work already in progress, we recommend that firms accelerate efforts to collect data, and report and make public commitments to increase workforce diversity.

Finally, sustainability remains high on the agenda and our industry is at the forefront of the collective efforts of government and the private sector in tackling climate change.

We agree with the government’s focus on building back better from this pandemic, including the Prime Minister’s ’10 point plan’ announced last autumn and its plan to issue a sovereign green bond later this year.

We call on government and industry to work hand in hand to achieve the UK’s 2050 net zero target and for the government to take the opportunity to drive international collaboration in its Presidency of COP26.

We also recommend that the government, including through the tax system, should implement incentive structures to promote sustainable investments.

For our part, the industry’s contribution to a sustainable economic recovery will focus on green finance, through products like green bonds and green loans. TheCityUK will be producing a new Green Finance report in the coming months to scope out the UK’s relative strengths in these products and services.

Conclusion

So to conclude, even though there is a growing sense of cautious optimism, the path out of the pandemic is still uncertain and there are no silver bullets.

We don’t pretend to have all the answers but we see our recommendations as the start, rather than the end, of a process.

We don’t want our report to sit on people’s bookshelves gathering dust.

It’s a roadmap we want to use to start a dialogue with central and local government, regulators, policy makers, small and large businesses, universities and others, as to how the financial and related professional services industry can work in partnership to accelerate the recovery and growth over the years to come.

And how we can put the full might of our collective efforts behind rebuilding and delivering a stronger and more resilient economy for cities and communities across the country.