This speech was delivered on the opening day of TheCityUK National Conference on 17 November 2020.
Good morning everyone. Welcome to TheCityUK’s first virtual National Conference. This is of course our flagship event for 2020, in our 10th anniversary year. It would have been much nicer to hold it physically, but I hope we can all make a success of this virtual conference over the next couple of days.
And thank you to our conference partner BNP Paribas for their support and also to our gold partners Yorkshire Building Society, DLA Piper and BNY Mellon.
We hold a National Conference because it gives us all the opportunity to focus in on the role and contribution of the financial and related professional services industry across the regions and nations of the UK. It is typically held in a different financial hub city every year. Manchester Birmingham and Cardiff have all hosted us previously, and this year we should have been in Leeds.
But there will nevertheless be a focus on Leeds and the Yorkshire and Humber region across the three days of this event – as well as a broader focus on the important role of our financial hubs all over the country.
What an unprecedented anniversary year it has been. I’m tempted to say what a dreadful year it has been.
Covid, Brexit and the US elections.
Who could have predicted Covid-19? The virus has blighted 2020, taking far too many lives and devastating economies around the world. Eight months on from the first UK national lockdown, we continue to be buffeted by this global pandemic and to suffer the impact it is having on the health and wellbeing of people all over the world.
The pandemic has given rise to unprecedented government interventions around the world. In the UK, the government moved quickly to support people, businesses and communities everywhere, and I’m proud of the part the financial and related professional services industry has played in these interventions, providing support to millions of customers and businesses.
Alongside the pandemic, the UK and EU are on the brink of concluding talks on their future relationship. While we do not yet know the precise shape of the deal – or indeed if there will be a deal at all – we do know that in all current scenarios, many important issues for our industry will not be included and must be resolved in other ways.
Deal or no deal, 2021 will bring great change for our industry as we adapt to a new trading relationship and rules, and the Chancellor laid out his vision of the future for financial services in Parliament last week. No doubt we will be discussing all this in much detail later on today.
And in the last few days, a new president-elect has emerged in the US, bringing into sharp focus our long-standing special relationship with the global superpower.
The coming months will be critical to refreshing this essential relationship, as we build on shared mutual priorities and progress towards a potential US-UK trade deal.
Over the next few days of this conference, we will consider the role the industry has played so far during the crisis. We will examine how it can help to rebalance and ‘level-up’ the economy. We will consider the opportunities we must all seize. And we will discuss what we must do to revitalise our own industry and continue to innovate in the face of uncertainty and challenge.
We should recognise that the backdrop for recovery, rebalancing and future growth is now framed by the pandemic as well as by Brexit. This will make the road ahead more complex: existing trends have been accelerated or accentuated by Covid-19; the international slide towards protectionism and isolationism; the barriers to addressing climate change; the need for greater diversity, inclusion and equality at all levels; and rapid technological development and expectations to name just a few.
Charting a way out of this crisis is not easy, but financial and related professional services are determined to play their role in navigating the path ahead, in boosting jobs and growth, and in continuing to drive forward transformation right across the industry.
The prevailing uncertainty makes detailed planning almost impossible. However, it is already clear that given the scale and the pace of change, we must establish a closer partnership between our industry, government and the regulators.
After every economic crisis, there comes a period of economic renewal. But it will take concerted effort to ensure that this renewal and the opportunities that stem from it are realised in all parts of the country.
For our industry, the many thriving financial hubs across our regions and nations can and must play a significant role in supporting this effort. From Bristol, Cardiff and Birmingham, to Leeds, Manchester, Belfast and Newcastle. Not forgetting of course the strong and well-established centres in Edinburgh and Glasgow.
Many of these cities have adapted and regenerated themselves over the years and their experiences and the lessons they have learned will be invaluable for the post-crisis recovery.
As the Chancellor highlighted last week in his statement, ‘financial services’ and ‘the City’ are not synonyms. Two thirds of the people who work in the financial and related professional services industry are based outside London. And almost half of the industry’s exports are generated outside the capital.
The industry is also a major contributor to local economies right across the UK and will therefore play a central role in driving forward the levelling-up agenda. This agenda is inseparable from the national recovery. And one to which our network of City Chairs across the UK is already making a valuable contribution.
Now, against the backdrop of Covid and Brexit, bolstering UK competitiveness will be essential.
As we all know and take pride in, this nation has long been a world-leading international financial centre, providing products and services to millions of people to help buy a home, invest in a business, save for the future and protect against and manage risk. We have sustained this strength and status over the centuries through our ability to adapt and innovate. As the country seeks to recover from the pandemic and enters a new phase outside the EU, it must adapt and innovate again and remain an attractive, compelling and open place to do business.
To play its full role in driving forward the recovery, the industry must also continue to make progress on its own transformation.
The Chancellor’s ambitious vision for the future of financial services identified some of the opportunities we must grasp. This must now be underpinned by further detailed work, and we look forward to helping to realise his priorities in the weeks and months ahead.
What shouldn’t go unnoticed is the great service provided throughout this crisis by the more than 2.3 million people who work in financial and related professional services. They have all shown great resilience and adaptability, and continued to serve and support customers up and down the country, in a number of the following ways:
- keeping call centres operating – often from their kitchens or bedrooms – and achieving astonishing levels of service
- supporting more than 1 million businesses to access government-guaranteed loans at pace – in some cases doing more than four-years’ worth of lending in three months
- offering customers mortgage and loan repayment holidays
- continuing to provide crucial legal and professional services to businesses and people up and down the country
- keeping markets operating effectively and seamlessly
- continuing to provide long-term finance so that, ultimately, savers’ and pensioners’ money can continue to grow, and finally,
- helping ensure their long-term financial resilience.
All parts of the industry have also come together to assess and quantify the impending debt challenge facing SMEs in the wake of the crisis and propose measures to address it. This issue was acknowledged last month by the Chancellor in his Winter Economy Plan, when he set out steps to lessen its impact. I expect that this second wave of the virus and the accompanying restrictions will further emphasise the challenge.
TheCityUK was established in the wake of the last global financial crisis – a crisis that stemmed from actions within the financial services sector. A decade on we face a very different crisis. One which started as a health crisis, but which has led to an even greater economic crisis than 2008, and which is likely to have deeper and more profound consequences. This time our industry is in a very different position than it was during the 2008 global financial crisis. Today we have been at the centre of the solutions, and we are determined to be at the forefront of the recovery.
There are no easy answers, but we are committed and determined to continue supporting economic recovery and sustaining the success of this world-beating industry.
Today – and over the coming days – I hope you will enjoy the various sessions across the agenda of our National Conference. I am very grateful to the many people who will be delivering keynote addresses and participating in panel sessions and the other events. I hope you will be able to join many of them.