The Guest Blog

Whoever Wins the UK Election Must Support the City

Nick Anstee|Lord Mayor of the City of London

As a keen long-distance runner preparing to run my 16th London Marathon later this month, I am well used to waiting for the starting gun to be fired on an eagerly-anticipated race.

Sharon Lorimer

Politicians up and down the country are in a similar position at the moment as they wait for the Prime Minister to call what, according to the polls, will be one of the most closely-fought elections for years.

The City's agenda is in no way conditional on who wins this contest – our message will not be affected by whoever forms the next government.

This is because it is in the interests of all parties to support a strong financial services sector, one that can provide the lending required by businesses and individuals to drive the economic recovery forward.

The industry makes a huge contribution to the UK economy, generating 12.1 percent of total tax revenues in 2008/09 and employing over one million people. We can ill afford to undermine our competitive position at a time when the country faces a record budget deficit and high levels of unemployment.

Yet damage has already been done to the Square Mile's perceived competitiveness. Concerns over taxation and the regulatory environment in London have been reflected in a number of recent reports, including one from the World Economic Forum.

In this regard, the 50p income tax rate and the one-off banking bonus supertax have not helped by making our business environment appear hostile to high-earners.

The City needs to continue attracting the best firms and talent from across the world, which means the government should reassert a consistent tax regime that balances global competitiveness with fairness. Clarity and certainty are key to achieving this.

Wider global implications also need to be taken into account when it comes to changes to the regulatory structure, not just here in the UK but also in the EU.

This is particularly true given the controversy surrounding the draft AIFM (Alternative Investment Fund Managers) Directive, which has provoked concerns about potentially damaging consequences across this international industry.

Protectionist and anti-competitive regulation will ultimately benefit nobody. That is why we need closer and earlier government engagement with the EU's decision-making bodies.

Too often the UK has been left on the periphery when it comes to key decisions that have affected all 27 member states, which is why I have held three meetings with Internal Markets Commissioner Michel Barnier in the past three weeks.

Regulation and taxation are not the only issues that affect the City's competitiveness. Our rivals are building for the future by developing modern business environments that are fully integrated with the most up-to-date technology and infrastructure. 

Therefore to maintain our competitive position it is vital that the government backs quality capital investment projects such as Crossrail. Improved infrastructure will pay for itself in the long-term as the economic recovery gathers pace across London and the UK as a whole.

Industry and government must continue to work closely to ensure we do not stand still or even go backwards in 2010 and beyond. This is a marathon not a sprint, but I am confident together we can succeed.


Nick Anstee is Lord Mayor of the City of London. He heads the City of London Corporation, which provides business and local government services to the City, one of the world's leading financial centers. From his position, he advises the government of what the financial services sector needs to function well. The Lord Mayor is elected for one year; the position is unpaid and apolitical.