Britain has officially progressed into the next chapter of growth, and can begin negotiations to achieve the trading partnerships and relationships that will secure our competitive future.
Having spent several years in the City myself and now as MP for Hitchin and Harpenden, a constituency with thousands working in financial services, this sector remains one of my key priorities.
London has already proven its market resilience. Investors continue to back Britain, putting faith in our economic and regulatory leadership. PwC’s global CEO survey shows that the UK’s attractiveness has returned to 2015 levels, with European chiefs regarding it a key market for growth and investment.
The IMF forecasts that the economy will outperform the Eurozone. And London still leads global exports of financial services: net figures in 2018 surpassed $82bn — more than the US and France combined.
Europe’s warning that City bankers would depart en masse for the continent, most probably France, has not transpired. Our pro-business environment and high quality of life will continue to attract top talent and investment.
In contrast, Paris is hardly the picture of stability; months of transport and labour strikes contributed to the country’s economic decline in the fourth quarter of 2019. With a divisive 2022 election campaign kicking off, investors will be carefully considering France’s political and regulatory landscape.
At the heart of our success is Britain’s regulatory system. Commitment to promoting competition and transparency is embedded in the cultural DNA of the Financial Conduct Authority (FCA). The same cannot be said of other regulators, particularly the French.
Indeed, France’s Autorité des Marchés Financiers (AMF), recently received criticism for imposing unprecedented penalties on two firms.
Bloomberg was fined €5m for reporting on a false press release regarding French construction company Vinchi, quickly retracting the story after the hoax emerged. Muddy Waters underwent a four-year investigation for simply criticising the accounting structure of Casino, the French retailer.
Like other organisations receiving similarly harsh scrutiny both defend the integrity of their actions and emphasise the need for market transparency from the AMF. The UK’s FCA stands tall in comparison.
Of course, we cannot afford to stand still. The City’s challengers are not Paris or Frankfurt — they are New York, Dubai, Singapore and Hong Kong. The greatest demand for financial services will come from Asia and, eventually, Africa. We should therefore improve our regulatory framework by prioritising international competitiveness.
UK regulation must also ensure that it works in the interests of all who live and bank in the UK. I believe that credit unions should have more freedom to lend, keeping people away from the clutches of payday lenders and increasing access to free, high quality financial advice, while new “opportunity zones” should be created across the country to incentivise financial services activity outside the Square Mile.
As the outgoing FCA chief Andrew Bailey has said, the benefits of regulation must be open to all.
London’s commitment to transparency and accountability, coupled with an unrivalled ecosystem of talent, will always be a source of strength for Britain, delivering for investors and consumers who need open, stable, and successful financial markets.