The newly reelected Mayor is right to tout the merits of financial services. When the City succeeds, London succeeds, says Chris Hayward
As Sadiq Khan returns to City Hall for an unprecedented third term as Mayor of London, this is a good moment to take stock of the challenges in the next four years, that we in the Square Mile and Greater London must overcome together. Foremost is cementing London’s place as a global powerhouse.
We must continue to be a dynamic, thriving city that people and businesses want to call home. That requires an entire ecosystem built for success: good transport, excellent schools, welcoming business culture and more.
But underpinning all our ambitions is economic growth and productivity.
Economic growth is vital for new, higher-paying jobs, creation of new businesses and products, and through increased tax revenues, helps fund our vital public services. As former Bank of England Chief Economist, Andy Haldane, said, ‘sustained rises in GDP have been shown, over the course of history to improve our health, our wealth, and our happiness.’
The question of raising productivity levels is also crucial to shaping London’s future. The United Kingdom’s productivity rate – at a meagre 0.4 per cent annually over last 15 years or so – is less than half of our international peers according to the Resolution Foundation.
We must continue to take steps forward, driving economic growth and raising productivity by exploring new fields, harnessing new technologies, and supporting people to develop new skills.
The answer to these fundamental economic questions can be found in the financial and professional services sector that is based in the Square Mile.
City of London jobs are currently at a record high, up 13 per cent on pre-pandemic levels, whilst the sector contributed £294bn in economic output in 2023. Add to the mix the fact that financial services jobs are one of the country’s most productive sectors – generating £177,000 in output for every job in 2022 – and you have a recipe for success.
Where the City succeeds, London succeeds. Where London succeeds, the country succeeds – it is that simple.
I was pleased to see Sadiq Khan touting the success of financial and professional services in his manifesto, highlighting our outstanding green finance and fintech sectors. Our most recent research shows in 2023, the UK’s thriving fintech and technology sector received a significant portion of financial services projects, attracting more than a quarter of all financial services projects – underlining the UK’s position as a global innovation hub.
At this critical moment, now is the time for all of London to work together to develop the skills, the investment, and the businesses of the future.
The Square Mile keenly awaits the Mayor’s new ‘London Growth Plan’. This is a tremendous opportunity to collaborate and develop sectors that are not only vital to the Square Mile, but for London and indeed the country. The City of London Corporation’s own Vision for Economic Growth report highlighted raising investment levels, anchoring the UK as a leader in sustainable finance, and becoming a digital-first economy as central to our country’s long-term economic health.
Working together, City Hall and Guildhall, I am confident that we will drive economic growth because the Square Mile has a track record of success of working with Mayors of all political persuasions.
We have delivered the Elizabeth Line, resulting in the Square Mile being more accessible than ever with Liverpool Street now the country’s busiest railway station. We have delivered investment into our capital, working with London & Partners to attract international funding. And together, we will deliver a new, world-leading, London Museum.
We must keep delivering, keep working for the people and businesses all across London and further afield, and keep expanding our horizons. Our ambition must be to not only maintain, but strengthen, London’s diverse economic and cultural appeal – the voters expect nothing less.
Chris Hayward is policy chairman of the City of London Corporation