The Lord Mayor and the Chair of the Policy and Resources Committee write as follows:
Speeding the recovery
It is urgent that we get the economy moving, safely and responsibly, by encouraging growth and jobs. Welcoming measures outlined by the Chancellor in his economic statement, the Policy Chair commented, “After the crisis of the pandemic itself, we must now avoid a prolonged crisis of the economy.” Within the Square Mile we have been working with TfL, businesses and other stakeholders to ensure that Government guidelines on social distancing can be met as City firms consider return to office plans.
TheCityUK convened more than 200 senior practitioners from 50 firms across the financial and professional services industry to think creatively about how industry and government could work together to support the recapitalisation of businesses in light of COVID-19. The work focuses on those businesses with the most acute need – unlisted SMEs who have taken loans through BBLS, CBILS – and the projected £35bn of unsustainable debt that carry the most risk for the taxpayer.
In a new report from TheCityUK, supported by EY, the UK-based financial and related professional services industry has published a far-reaching set of options for converting, restructuring and repaying this debt to help hundreds of thousands of SMEs get back on their feet, save millions of jobs, protect billions of pounds of taxpayer money, and help power Britain’s economic recovery and future growth. The report suggests that urgent action is needed, but the options, if taken forward, present a real opportunity for the government to leave a lasting positive legacy of regional growth and investment across all parts of the country.
Global reach and reputation
It is equally critical that the UK focuses on its global reputation. We must send the right message to global business and investors by retaining focus on long-term, global competitiveness. The Lord Mayor and Chair of Policy have met – virtually – senior stakeholders from overseas investors, HMG and international partner centres. Reflecting these discussions, the Lord Mayor wrote that renewed focus on closer relationships with key financial services markets will be vital to driving global recovery. Our international engagement has been centred around Asia Pacific in recent weeks with virtual visits to Japan, Singapore and China. Trade, building a sustainable recovery, and digitisation have been key themes. Australia is next for the Lord Mayor, as negotiations on a trade agreement progress.Our discussions have underlined the importance of open global financial centres and how they will win the most trust from their partners. The Policy Chair has highlighted the need for safe and responsible business travel to be prioritised as restrictions ease.
A UK wide offer for financial and professional services
As government funding winds down, the effects of the pandemic on businesses may be disproportionate across the UK. FPS will have a greater role to play, and the sector’s reputation will be shaped by its response. Over recent weeks discussions with senior leaders across the UK, including Scottish First Minister Nicola Sturgeon and Mayor of Greater Manchester Andy Burnham, have brought the importance of that response into focus. It is clear that FPS will be at the heart of the recovery across the country. Government is increasingly centring the sector in its thinking on levelling-up the UK. Each regional economy is different, but we have confirmed through our engagement that each have common goals: attracting investment; sustaining and growing FPS ecosystems; financing a green recovery and promoting their unique capabilities and assets globally. They will also need skilled populations to deliver on these ambitions; and a balance of policy and funding interventions to give them a platform. We will continue to drive engagement, and work with our UK partners to support FPS across the country.
Sustainability and green finance
Shades of a green recovery are emerging, but private finance has yet to define its role. More than 200 leading businesses have signed a statement urging UK Government to deliver a clean, inclusive and resilient recovery plan. However, there remains uncertainty over what this will look like in practice. Globally, finance needs to move fast to develop and scale solutions, and back these with capital. We were delighted to announce the Green Horizons summit, due to take place in November – a major milestone in the road to COP26 – November 2021. The event brings together the best minds on how to advance green recovery and implement a credible transition to net zero.
Investors will be focused on improving their approaches to responsible investment. We are proud supporters of IMP+ACT – a world first tool that enables asset owners to compare investment products by environmental and social impact. It will make it easier than ever for institutional investors to allocate more capital to sustainable investment.Our new report, Resilience: lessons to scale responsible investing, under the UK-China Green Finance Centre, makes recommendations supporting asset owners and managers to allocate more capital to sustainable solutions. Cooperation between the UK and China is an opportunity to accelerate sustainable recovery.
Closer to home, the City of London Corporation is committed to addressing the climate crisis – for us as an organisation, and the Square Mile. We are producing our Climate Action Strategy and invite your contributions. From 13 July please visit www.cityoflondon.gov.uk/climateaction to formally feed into the draft strategy. If you would like to be notified directly as the strategy develops please email us.
Championing equality and diversity
Equality is at the forefront of everyone’s minds. The City Corporation statement in response to the Black Lives Matter movement sets out our commitment to taking radical action to advancing equality for BAME people.
Although we couldn’t celebrate in person, June saw the raising of the Pride flag over the City of London’s landmark sites in celebration of Pride month. A visible demonstration of our solidarity with the LGBT community in the UK and globally.
As reports suggest the pandemic is deepening the gender pay gap, the Policy Chair urged the industry to increase the pace of progress, during the annual review of the Women in Finance Charter.
UK businesses are starting to take steps towards recovery and a new normal. We look forward to continuing our work with partners in central and local Government and industry, at home and around the world, to help speed a global recovery.
William Russell, The Rt Hon The Lord Mayor
Catherine McGuinness, Chair of the Policy and Resources Committee