Treasury Orthodoxy: Fact of Fiction?

It’s always great to be in Edinburgh. This week I had the honour to join an event organised by The Strand Group at King’s College London, introducing former permanent secretary at the Treasury, Lord MacPherson’s lecture on “Treasurt Orthodoxy: Fact or Fiction”. Representing the City Corporation as Vice Chair of Policy I highlighted the importance of financial services sector across the UK, and urged governments to support the UK’s valuable assets: talent, institutions, infrastructure, and the rule of law.

Lord Macpherson, distinguished guests, ladies and gentlemen, good evening,

I’d like to thank Catherine for the warm introduction and welcome to Edinburgh.

For those who may not know me, I’m Tijs Broeke, the Vice- Chair of Policy at the City of London Corporation, and we are delighted to be sponsoring today’s lecture.

I’m proof that the City of London has – throughout the centuries – always been very skilled in diplomacy. Sending a Dutchman to Edinburgh to strengthen the ties between our two great cities is a clever plan. Sending a Dutchman whose husband is Scottish and whose in-laws live an hour’s drive away is a genius plan.

Before I introduce, Lord Macpherson, I would like to take a few minutes of your time to discuss the City Corporation’s work across the United Kingdom, our work with His Majesty’s Treasury, and what more we can do to develop our financial services sector outside London.

If you are unfamiliar with the work of the City Corporation, we have a unique dual role…

… we are the government of the Square Mile tasked with keeping the City the best  and safest place to live, visit, connect and do business…

… and we are an ambassador of financial and professional services in the United Kingdom.

As such, we showcase London and indeed the entire United Kingdom’s position as a leading financial and professional services centre in the world.

That means striving to strengthen our competitiveness as a trading nation on the global stage and promoting the UK as a place that is open, innovative, and sustainable.

We engage and work closely with the government and opposition parties, in addition to policy-makers – speaking to them about the concerns, issues, and challenges facing FPS firms – including a recent visit by our political leader to the SNP conference in Aberdeen.

And whilst many may associate financial services with the City, two-thirds of the 2.3 million people in our FPS sector are based outside London.

Indeed, the City Corporation supports exceptional FPS clusters across the UK: from regtech in Belfast, to lawtech in Leeds and financial services here in Edinburgh – to develop trade and encourage inward investment.

We should not, therefore, view financial services as a ‘London thing’, but a vital component in the engine of the entire country, our regions, and devolved nations.

Consequently, the sector can play a vital role in the UK Government’s levelling up agenda to promote growth. We have been working hard with His Majesty’s Treasury to improve the competitiveness of the financial services sector, including the publication of a ground-breaking ‘State of the Sector’ report.

We’ve been delighted that there has been strong engagement and input from industry on the report, and the final recommendations show what can happen when we work collaboratively towards common goals.

But as we all know, recent conditions have been extremely challenging and storm clouds have unquestionably gathered. Market instability, energy price inflation, and the cost-of-living crisis mean the United Kingdom faces a difficult winter ahead.

But despite the economic turmoil of recent weeks, our financial institutions and infrastructure have demonstrated their resilience, robustness, and commitment to long-term stability.

The UK’s fundamental assets – talent, institutions, infrastructure, and the rule of law – are sizable reasons why we have historically been seen as an attractive place to invest, and I am confident in our ability to retain that international appeal in the future.

Indeed, just last week I was sitting next to the President of an international oil and gilts exchange, at a dinner in Mansion House. He told me the key strengths of the UK are robust and innovative regulation, the rule of law and an attractive financial sector ecosystem. On my other side was an Italian fintech entrepreneur who swapped Silicon Valley for the UK, because of our high-quality universities and access to global talent.

We also discussed the recent ‘mini-budget’. Both agreed that group thinking, and ideology had hit against the reality of the markets…

It’s important therefore that future UK Governments – be it a Labour or Conservative Government – ensure we protect the UK’s fundamental assets.

This is why the City Corporation welcomes and congratulates Rishi Sunak on becoming our new Prime Minister.

We worked closely with him as Chancellor and now look forward to building on our positive relationship with him as Prime Minister.

It is vital – vital – that his premiership offers stability while also confronting the fundamental challenges facing our entire country.

And it is on that note, that I hope I have set the stage for Lord Macpherson.

Lord Macpherson of course needs no introduction, but he served as Permanent Secretary to the Treasury from 2005 to 2016, and his talk tonight is about ‘Treasury Orthodoxy: Fact or Fiction?’