The Times cover on my report
My report on the City received coverage across the media, online and in print. This article appeared in The Times on 21st May, 2021 and is available here: https://www.thetimes.co.uk/article/city-must-be-more-competitive-after-brexit-x2z232769
THE CITY MUST BE MORE COMPETITIVE AFTER BREXIT
Gurpreet Narwan, Britain’s financial services industry needs to become more competitive as it has a critical role in levelling up the economy, according to a report. The Policy Exchange think tank said that the City of London and the broader financial services industry had fallen victim to a policy of “benign neglect” since the EU referendum in 2016. The Brexit deal made no provision for financial services, a sector that accounts for 7 per cent of the UK economy, or £132 billion of GDP. A memorandum of understanding between the UK and EU in March established a framework for regulatory co-operation. However, they have yet to reach an agreement on “equivalence”, the principle that one party’s standards must conform with the other’s. The Policy Exchange, set up by Michael Gove and other senior Tories when they were in opposition, warned that the sector would struggle to “maintain its competitiveness in the face of an aggressive EU”.
Gerard Lyons, senior fellow at the Policy Exchange and former chief economic adviser to Boris Johnson as mayor, said: “There has been a policy of benign neglect in Westminster towards the City and UK financial services for much of the time since the 2016 referendum. In the face of an aggressive EU and intense global competition, the City needs a government that is prepared to go into battle for it.”
The report said that the City could play “a lead role in rebalancing the economy and delivering strong, sustainable growth”. It outlined a number of proposals, including the creation of regional centres outside London, which could provide back office to the City.
“This could encourage onshoring of these back office and other services and increase employment opportunities in regions that haven’t historically benefitted from London’s status as a centre of global finance,” the report said.
It also called for a review into the “Macmillan gap” between small and medium-sized enterprises and larger companies when it comes to raising finance. It said that regulators should reassess capital requirements on smaller to mid-tier banks to help boost bank lending to the regions.
The report added: “The UK’s departure from the EU provides a golden opportunity for the City. However, it is not just leaving the EU but what we do now that we have left that is key.”