Vision for Economic Growth — a roadmap to prosperity 5 Foreword Foreword\ Nicholas Lyons Christopher Hayward The Rt. Hon The Lord Mayor of the City of London Policy Chairman of the City of London Corporation The UK has enjoyed numerous periods of strong the world’s pre-eminent 昀椀nancial centre under Britain needs strong economic growth. A growing We must demonstrate how 昀椀nancial markets can help economic growth in the past. After World War Two, increasing threat. The London Stock Exchange economy means more investment, more jobs, and deliver the world’s transition to net zero. The UK has 1 the nation saw a sustained period of economic growth raised £16.3bn in 2017 — but, in 2021 the 昀椀gure more funding for public services. With the right made the early running and now we need to solidify 2 7 and near-full employment until the 1970s. But there’s was just £10.5bn. Meanwhile, London was not conditions, FPS can help drive economic growth that lead, becoming the go-to partner for green 昀椀nance. nothing preordained about growth: a peak won’t the clear leader in the City of London Corporation’s across the country. necessarily follow this trough we 昀椀nd ourselves in, annual benchmarking report for the 昀椀rst time ever We must think bigger on exports. Financial services post-Covid. And while the City has for so long supported this year — instead ranking joint 昀椀rst with New York. The sector is already one of the United Kingdom’s great 11 By the exports were worth £91bn to UK plc in 2022. 8 the UK’s prosperity, there’s no guarantee that will success stories. Not only does it provide 2.5 million jobs, end of the decade they can be worth even more, a 9 but £100bn in tax contributions each year; that’s more always be the case. The right conditions must prevail — These challenges are a wake-up call, and we cannot potential additional £24bn over 6 years, if we take action 10 than we spend on defence and policing combined. keep hitting the “snooze” button. to promote our exporting 昀椀rms. More exports will create good levels of investment, digital infrastructure, agile more income for UK companies, meaning more money regulation, a coherent 昀椀scal regime, a supportive I’m happy to say that change is already underway to But with international competition growing — from for our public services. political environment — or the sector will not be able New York in the west to Singapore in the east — our to fuel our economy in the way it must to support 21st boost the FPS sector. Recent reviews including Hill, century industries. Kalifa, Austin and Kent have set wheels in motion. past success is no guarantee of our future. We must make sure we operate on solid ground: being a great place to do business, being competitive on tax Organisations like TheCityUK, UK Finance, the Association If we want the UK to thrive, if we want FPS to remain the and drawing in talented people from across the globe. At the moment, there are three key challenges of British Insurers, the Investment Association, the engine of our economy, driving economic growth and Financial Services Skills Commission, and the Capital hampering the UK economy and the 昀椀nancial and helping to fund the public services we all rely on, we professional services (FPS) sector in particular. Markets Industry Taskforce — to name just a few — Our shared aim must be for our FPS sector to be the best- must take action. in-class, driving UK plc, creating the wealth and jobs that are helping create real momentum. And the Financial support the economy and supporting public services for GDP growth rates and labour productivity are not what Services and Markets Act and Mansion House Reforms We must take action so that growing 昀椀rms can get the remainder of this decade and beyond. they once were. Between 1995 and 2005, GDP growth are tangible products of this work. But we need to have the 昀椀nancing they need to grow and succeed here in and average wages grew by 29% and 30% respectively a long-term strategy for FPS towards which we in the in real terms. But between 2010 and 2020, they grew by City can all work to boost the UK’s competitiveness. Britain, and not have to cast their nets further a昀椀eld. Vision for Economic Growth has been produced with 3 Between 2008 and 2020, the UK saw Small 昀椀rms that grow here today are the big employers the input of more than 300 stakeholders from across just 8% and 4%. productivity growth of just 0.4% per year, compared to of tomorrow. This “roadmap” builds on all of this — focusing on the FPS. It outlines the sector as it can be. A roadmap for 4 an average of 0.9% in the 25 richest OECD countries. policymakers and politicians to strengthen the sector “Big Moves” we need to make over the ensuing months and years to catalyse further change. There’s no quick We must take action to lead in the adoption of new right across the country, so that together, our economy One study suggests GDP growth booms are nine times technology, not follow on behind. We must give our can grow and our future can 昀氀ourish. We now have an 昀椀x for sustained growth, prosperity and international 5 more likely with a higher level of business investment. regulators the licence to operate at the cutting edge opportunity to back British success, promote our world- competitiveness. So, this is a long-term approach But UK business investment as a proportion of GDP and to lead on arti昀椀cial intelligence (AI), machine leading sectors, and drive economic growth. We can that will extend well beyond my term as Lord Mayor remains lower than in almost all other G7 economies — learning, and other technologies. By setting global and we must take it. and across the next Parliament. I’m con昀椀dent if all and it’s been this way for decades.6 the key stakeholders pull together and follow these standards, we can lead the way, providing a competitive recommendations, we will have an FPS sector that is 昀椀t boost to our companies. If the FPS sector is the engine of the UK economy, it’s in to 昀椀nance our future. urgent need of a service. Meanwhile, our competitors are revving their own engines — putting the UK’s role as