Economic growth is Starmer’s greatest challenge, but the City is ready to tackle it, writes Lord Mayor of London Michael Mainelli
The City of London Corporation works with any elected government, and after 14 years, the Labour Party is back in power. The City Corporation stands ready to support the government on its five missions and delivering on the important things that matter: creating more high-skilled jobs, funding for public services and tackling the climate crisis.
As Sir Keir Starmer sits down this morning for his first full week in Downing Street he faces many challenges. But none are as serious, or as pressing, as economic growth.
Since the global financial crisis, our economy has struggled. We’ve underperformed against the historic average in GDP growth, GDP per capita growth, average earnings growth and productivity growth, with consequences felt by families and businesses up and down the country.
If we want more funding for our public services like the NHS, if we want high-skilled jobs, if we want opportunities for our young people to thrive, we need a growing economy.
In short, kickstarting economic growth is the best way to build a better country, and it is important that this was recognised as such in Labour’s manifesto as one of the party’s five missions.
Here in the City, we can power the nation’s economic recovery.
Financial and professional services are – to quote the Labour manifesto – “one of Britain’s greatest success stories”.
The sector employs over 2.4m workers nationwide with two-thirds outside of London in places like Manchester and Edinburgh, Birmingham and Leeds, and contributes over £110bn in taxes annually – more than the annual education budget.
But financial and professional services are about more than big figures, it’s about the everyday impact – supporting people to progress. Whether investing in a pension for a great retirement or a mortgage to get on the housing ladder, financial services help people and businesses succeed.
A strong, sustainable, dynamic financial services sector is vital for personal wellbeing and the health of the nation. That is why Gordon Brown began the New Labour revolution here in the City, with the independence of the Bank of England – a move that he described as among the “tough decisions needed to deliver stability for long-term growth”.
Today, Sir Keir Starmer and Rachel Reeves have to similarly cement the City as the foundations from which all else can be built.
The Square Mile is ready to partner with this new Labour government, working to help improve lives and livelihoods by creating well-paid jobs, investing in new technologies and building new businesses.
But to achieve economic growth and the promise of a brighter future, we need investment.
Last year, the City of London Corporation convened the financial and professional services sector around our Vision for Economic Growth – reforms that could unlock up to £225bn of investment across the UK.
Our Vision for Economic Growth will have very little cost to government, require little legislative effort, but can raise investment levels, anchor the UK as a leader in sustainable finance and make the UK a digital-first economy – vital steps for economic growth.
For too long, we in the United Kingdom have placed too great an emphasis on trying to eliminate risk entirely – we have let the perfect become the enemy of the good. Risk is necessary for innovation, for investment, for economic growth. A responsible, risk-based culture – such as pension funds investing in British start-ups – is key to delivering strong economic growth.
When the Labour Party thanked the financial services sector for their contributions to their ‘Financing Growth’ review in February, I welcomed Rachel Reeves and her team to Guildhall. It was clear then that Labour is serious about partnering with industry to unlock investment and kickstart economic growth.
I look forward to working with Chancellor Rachel Reeves and her entire Treasury team to deliver life-changing jobs, opportunities and economic growth right across the country.