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Crawford's Directory of City Connections 2008

Foreword

The Rt.Hon.John Hutton MP

There is no doubting the importance of the City as the world’s leading international financial centre. The facts and figures highlighting the City’s success at attracting international business speak for themselves: it has the biggest share of foreign listed equities, the largest share of international bank lending and the most foreign banks. And it is good for the UK with financial and associated services employing 1.3 million across the UK. The sector and associated support services account for 12 per cent of the UK’s GDP.

It is symbolic of the strength of the economy since 1997, that has seen 2.6 million more jobs, rising national prosperity and a UK GDP per head, which was the lowest in the G7 before 1997, now the second highest behind the US.

Businesses choose the UK as their financial base for a number of reasons. The City has a highly skilled, efficient, flexible workforce, which helps it to innovate and embrace new opportunities. It acts as a one stop shop for finance with the convergence of financial, legal, accounting and management consulting companies acting as a powerful magnet for investors, operators and customers. Furthermore the City has widely respected professional and support services that are central to streamlined business operations, and a consistent, politically-neutral legal system that is widely used and understood globally.

There are also other factors – a central position between Asian and American time zones allowing London to work virtually around the clock, and an inherent international outlook from our strong global trading heritage that informs the openness and international outlook of today’s trade policies.

Two other key areas that businesses tell us are important are the areas of regulation and tax. A proportionate regulatory regime that is effective, fair and focussed has become an international benchmark and a draw for international business. We have the lowest main corporate tax rate in the G7 major industrialised countries.

Far reaching and fundamental changes in technology and trading patterns are transforming the global economy. The Government is working to maximise the gains to the UK afforded by globalisation. Competition can come from anywhere. People, capital, goods and services are able to cross the globe more quickly and effectively than ever before. Whatever the size or location of a business, these factors impact the bottom line; they shape the workforce and influence shareholders, and they help define future competitiveness and success.

The expectations and ambitions of individuals are also growing. The public want more from the governments that serve them and the businesses they buy from. They want efficient solutions that meet their needs and better value for money. Pressures on business to compete are significant, but one must also bear in mind that globalisation and individuals’ rising ambitions create opportunities. Our aspirations for Britain depend on promoting free and fair markets. We know we need to build on the excellent foundations to promote UK financial services around the world more strategically than ever before.

Last year UK Trade & Investment (UKTI) launched a City Strategy to enhance the UK’s position as the world’s leading international financial centre, a key building block in the City Competitiveness Initiative announced by Gordon Brown in his 2006 Budget. The key to making this work is partnership with the City’s business sectors. We therefore established the Financial Services Sector Advisory Board to advise us on the strategy.

Over the last year we have seen some very positive developments.  We have made further progress through changing our approach to the way we promote our financial services sector. Successful ministerial trips to India by Gordon Brown and Alistair Darling have seen commitments from the Indian Government on market access for financial services.

We signalled a concerted effort to reinforce the profile of UK financial services on the markets of India and China, with better coordination of initiatives. New diplomatic staff in the two countries are also concentrating on financial services.

We have been closely involved with China in developing the country’s insurance market as well as promoting Chinese listings on the LSE. This saw UKTI Chief Executive Andrew Cahn visiting Shanghai to attend the opening of Lloyd’s of London last April. Building on this to further cement our close and dynamic partnership between UK government and business, we have appointed former Lord Mayor Sir David Brewer, Chairman of the China-Britain Business Council, as the UK financial services sector ‘China Champion’ and Gerry Grimstone, Chairman of Standard Life, as ‘India Champion’.

The close working relationship between the government and the business sectors in the City is exactly the type of partnership that I want to see with all sectors. Such an approach will help overcome the economic and social challenges we now face, and help us seize the opportunities presented by better technology, a larger and more flexible global workforce, and rapidly growing emerging markets.

One of the key challenges we face is climate change. We also recognise, however, that this is an opportunity. The City of London is emerging as one of the world's leading financial centres for carbon markets. Five years ago the carbon market didn’t exist. Today London is the pre-eminent location for carbon trading, a market which is already worth over £9 billion. The formation of the International Carbon Action Partnership (ICAP) is an extremely important contribution to the global effort to solve the urgent problem of climate change. Business tells us they want clarity on what they will be asked to do, and that they prefer a market-based approach. That is why the global carbon market will be fundamental in the move to a low carbon economy, and why ICAP is such a valuable forum, with its practical emphasis on collaborating and sharing experience and expertise.

I am confident that the City and UK financial services can continue to go from strength to strength, to compete and prosper in global markets.

Ends.

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The Rt.Hon.John Hutton MP
Holds overall responsibility for the Department for Business, Enterprise & Regulatory Reformand its policies.

Biography

John Hutton was appointed Secretary of State for the Department for Business, Enterprise & Regulatory Reform on 28 June 2007.

He was previously Secretary of State for Work and Pensions.

John Hutton entered the Cabinet as Chancellor of the Duchy of Lancaster in May 2005.

He was previously Minister of State with responsibility for Social Care at the Department of Health in 1999. He took on responsibility for Health in June 2001.

Before his election to Parliament he was a Senior Law lecturer at the University of Northumbria. From 1994 to1997 he served on the Select Committee for Home Affairs.

He was PPS to Margaret Beckett, both while she was President of the Board of Trade and Secretary of State for Trade and Industry (1997-8), and in her role as President of the Council and Leader of the House of Commons (1998). Mr Hutton was appointed Parliamentary Under-Secretary of State for Health and Social Care in Oct 1998.

Mr Hutton was born on the 6 May 1955 and was educated at Westcliffe High School and Magdalen College Oxford. He is married to Heather Rogers. He has three sons and one daughter.