The City must also ‘export’ its services to the rest of the UK
City grandees were in pretty chipper mood last night at the annual dinner of the Corporation’s Policy and Resources Committee — an event that is far, far grander than its prosaic title sounds.
Despite the gloomy headlines about the dearth of IPOs and companies shifting their listings to New York they insist the Square Mile is evolving, not declining.
They point to the growth in overall City employment and the speed with which skyscrapers such as 22 Bishopsgate filled with tenants, despite concerns that hybrid working has made the traditional office redundant. In his speech, committee chairman Chris Hayward called for services — and particularly the City’s specialities of financial and professional services — to be given far greater priority in the Government’s trade policy.
As he put it: “As a country, we export more of our management consultancy services than we do cars.”
He has an unarguable point although the plea has a stable door and bolting horse feel to it.
The mighty services sector, which does after all account for more than 80% of Britain’s GDP, was ridiculously overlooked in the Brexit trade negotiations. That would have been the time to put services front and centre of trade policy.
Many of the barriers to European markets that Brexit created are still in place, although they are gradually being lowered through painstaking negotiations as relations with Brussels slowly warm up.
But he is right about the direction of travel. And although the City is a thriving tech power house, today’s worrying report from Goldman Sachs shows that we still have a long way to go in creating the high productivity small businesses that could power the economy out of its current productivity malaise.
Lack of access to finance was flagged as one of the key challenges holding these firms back.
So as well as selling its wares to the rest of the world the City must not neglect “exporting” its services to the rest of the UK to help bridge that yawning funding gap.
