Calls for a new finance council to boost growth

The City of London Corporation has called on the government to form a new financial and professional services council to help the UK escape its low-growth situation. The increase in the economy has only been marginal in the last three consecutive quarters with two of them going up only 0.1 per cent.

But forecasters say in the long-term it sets Britain on course to grow faster than European neighbours such as Germany – the power house of the European Union – France and Italy and crucially swerve a recession.

The governing body in London’s financial district has urged politicians to add “urgency, impact and direction” to their plans to bolster the City by romping in some of its brightest minds for advice, as London’s capital markets continue to be squeezed by international competitors and growth stalls.

The group would be similar to the wider business council run out of the Prime minister’s office, and would help execute a long-term strategy for how financial and professional services can drive economic growth.

The idea is just one of a host laid out by the City of London Corporation in a “roadmap” to economic growth published on 7 September. The paper also calls for pension funds to unlock more capital, greater use of digital data in company reporting, a focus on sustainable finance, and the creation of a support hub that would boost service-oriented trade partnerships.

JPMorgan, KPMG, Schroders, EY and Barclays co-authorised the report. Katharine Braddick, Barclay’s group head of strategic policy, said that while the UK “has a long and successful track record as a key player in global markets,” the City needs to work with regulators and government to stay on top.

“The last thing we can afford is complacency,” KPMG partner Huw Evans said. Schroders’ senior public policy adviser Shiela Nicoll said the report highlighted an “urgent” need for a strategy to unlock sectors such as sustainable finance and technology.

The chief executive of the British Private Equity and Venture Capital Association, Michael Moore, added that “our international competitors are not standing still, so as they continue to adapt, we must do likewise.”

The City of London Corporation’s growth plan has added to a deluge of work that has sought to help London’s progress as a listing’s centre. ARM priced its IPO earlier this month, having picked the US over London despite overtures from politicians for the firm to list on its home turf.

Meanwhile, WE Soda abandoned its plans to list in London, citing “extreme investor caution.” That left CAB Payments as one of the few significant listings wins this year for the City.

The London Stock Exchange has tried to boost its own competitiveness by signing a new technology deal with Microsoft and expanding into areas such as blockchain-powered trading. Meanwhile, the government’s Edinburgh Reforms and Mansion House compact have ushered in more than 30 separate consultations or policy announcements to boost the City’s standing.

The Financial Conduct Authority has also begun reforming its listings rules. It is reducing the track-record requirements for young firms looking to list. It is also opening the door to the ‘golden share’ sweeteners favoured by the founders of US startups. Several grandees from the City (financial district) were planning to come together to create the definitive blueprint for a path forward, having grown tired of what one person familiar with their plans dubbed “review-itis.”

The City of London Corporation says its roadmap could boost the economy by £225 billion. That would be made up of £75 billion from the government’s Mansion House reforms, £100 billion from insurance reforms and £50 billion from net zero (emissions) investments. (The writer is our foreign correspondent based in the UK)