TheCityUK 2024 roundup

Over the year we have delivered a number of key outcomes across our strategic priorities of:

• long-term competitiveness
• international
• regions and nations
• green and sustainable finance
• trust and reputation

...on behalf of our members across the financial and related professional services industry.

Through a range of activities, including thought leadership, economic research, meetings, conferences and various events, we have brought our members together with senior policymakers and regulators to drive forward policies that facilitate inclusive growth.

Here is a snapshot of the year’s highlights:

Long-term competitiveness

Actively led a campaign, alongside members and key stakeholders, to push back on the Financial Conduct Authority’s (FCA) proposals to ‘name and shame’ firms and/or individuals before the conclusion of enforcement investigations. The letters we co-signed with other trade associations and business groups outlining the industry’s strong opposition led to a front-page story and articles in the City A.M., Financial Times, Reuters, Politico and others. Our CEO was the first to give evidence to the House of Lords Financial Services Regulation Committee. Following this campaign, the FCA published amended proposals in late November, moving on several issues we had raise. However, we have been clear that there are still some key areas that need further focus and that the proposals risk running counter to the regulators’ secondary competitiveness and growth objective. We are continuing to engage with the FCA on this important issue.

Made the case to the Chancellor for a revived focus on revitalising UK capital markets, particularly public equity markets. These resulted in the government legislating to establish a Private Intermittent Securities and Capital Exchange System (PISCES), an extension of the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) scheme to 2035, plans to create a ‘concierge service’ for major international investors, and expansion of the ISA regime to include Long-Term Investment Funds. The government also committed to the digitalisation of ISAs, and implementing digital ISA reporting systems for managers as a first step. Capital markets are recognised as an important cross-cutting issue in the government’s Financial Services Growth and Competitiveness Strategy.

Influenced the FCA ahead of its consultation on payment optionality for investment research, detailing how to best implement these reforms. Our recommendations were reflected in the FCA’s formal consultation.

Took steps to protect our industry’s access to necessary data, providing evidence to the House of Lords European Affairs Committee on EU-UK data adequacy, and addressing the FCA’s concerns on data asymmetry between Big Tech firms and our industry. We were pleased that the FCA’s approach aligned with our recommendations. Feedback shared through the International Regulatory Strategy Group (IRSG), our joint venture with the City of London Corporation, on the now fallen UK Data Protection and Digital Information Bill has been reflected in the government’s new Data (Use and Access) Bill.

Supported the digitalisation of UK capital markets by submitting a response to the FCA and Bank of England Digital Securities Sandbox consultation through consultation with members. Recommendations included the vital modernisation of our markets, such as a digital gilt instrument, which the Chancellor announced in November will be piloted.

Continued to promote the need for a clear, stable and internationally competitive tax regime, including a business tax roadmap. Following engagement with the Labour Party, both pre- and post-election, the Chancellor published a Corporate Tax Roadmap, with confirmation that Corporation Tax will stay at 25% for the remainder of the Parliament. Ahead of the Autumn Budget we engaged with HMT and HMRC on their consultation on the carried interest regime and have subsequently been invited to join an HMT-led working group to help the government fine tune and implement changes to the regime.

Pressed for changes in the legal services sector, including stronger diversity and inclusion in the profession, regulatory enforcement actions and further investment in the justice system. We published our annual ‘UK legal services 2024: legal excellence, internationally renowned’ report showing the crucial role of legal services to the economy. The report formed the basis of many discussions throughout the year with Ministry of Justice (MoJ), the Solicitor’s Regulatory Authority (SRA), Legal Services Board (LSB) and Lord Chancellor in highlighting the sector’s contribution to the government’s growth mission and industrial strategy.

Trust and reputation 

Called for pension reform through a series of roundtables, meetings and ongoing engagement with Treasury Ministers. Our ask for greater consolidation of Defined Contribution (DC) as a positive step in contributing to better pension performance, efficiencies, governance and saver outcomes was reflected in the Pension Scheme Bill and the planned measures included. The government’s plans to legislate to require Local Government Pension Schemes (LGPS) to consolidate their assets into fewer, larger pools of assets, reflect our recommendations for LGPSs to meet their full potential on responsible investment, management of climate risks and investment in local growth and development.  

Made clear the need for an ambitious growth mindset from government and regulators to the Chancellor, politicians, officials and regulators to underscore that this is a crucial issue for the UK that urgently needs to be addressed to boost growth. The Chancellor recognised this by saying in her first Mansion House speech “...the UK has been regulating for risk, but not regulating for growth”, and that it has inadvertently created a system that seeks to eliminate risk taking. The government issued new remit letters to the financial regulators underlining their role in delivering growth, and the need to fully and rapidly embed their secondary competitiveness and growth objectives. They also updated the remit of the Financial Reporting Council (FRC), emphasising the role it should play in promoting growth and competitiveness.  

Our submission to the Department for Business and Trade (DBT) to feed into the government’s Industrial Strategy, focused on our industry’s enabling role in driving the multi-sector industrial strategy and growth mission. We have also submitted a paper to HMT to help inform development of the financial services competitiveness and growth strategy.  These submissions form the basis of our on-going engagement with DBT, including with the Permanent Secretary, and with HMT.

International 

Informed the government’s Trade Strategy Review by convening members and DBT to provide industry input into the government’s Trade Strategy review. This has emphasised the need to build on the UK’s comparative advantage in services and shaped our input to the government’s work on the Industrial Strategy, where we have highlighted the need for alignment between UK industrial trade and trade and investment strategy.  

Made the UK more attractive to international investors by securing improvements to policies impacting international investors in the UK market and working with trade association partners and government on guidance to the National Security & Investment (NSI) regime and taking our members out of the scope of the primary tier of the proposed Foreign Influence Registration Scheme (FIRS). We have shaped UK thinking on outward investment screening, and its approach to investment attraction via an enhanced Office for Investment.  

Urged government and regulators to work with our industry to develop an holistic international benchmarking framework to assess and monitor over time the UK’s international regulatory competitiveness, as well as the regulators’ progress and impact in implementing their secondary competitiveness and growth objective. The Economic Secretary to the Treasury and the FCA responded positively to the report, committing to actively engage with our us and members to progress the next phase of this work.  

Our market activity, through delegations and support for regulatory dialogues, has delivered strong engagement with US stakeholders throughout the Presidential election cycle, improved the EU-UK business relationship and coordinated industry input to the EU-UK Financial Regulatory Forum, supported commercial diplomacy with key growth markets including India, China, and Hong Kong, and developed greater synergies between our Islamic Finance and ASEAN work. 

Made the case for ambitious global rules on digital trade and data transfers at the World Trade Organisation, working in close cooperation with peers in the Global Services Coalition, which has led to the first WTO agreement on commercially meaningful rules on cross-border data transfers and digital trade. We also successfully campaigned for the retention of the WTO Moratorium on Customs Duties on Electronic Transmissions.

Regions and nations 

Made the case in our annual ‘Enabling growth across the UK’ report for greater devolution across all regions and nations and a strong role for local leadership in driving growth leading to (the then) Chancellor Jeremy Hunt announcing new economic powers for the new North East Mayoral Combined Authority, as well as existing county councils in Warwickshire, Buckinghamshire and Surrey. This position was also reflected in the Labour Party’s latest policy document ‘Power and partnership: Labour’s plan to power up Britain’, and Rachel Reeves confirmed integrated single funding settlements for the West Midlands and Greater Manchester Combined Authorities as well as indicating that other Combined Authorities will benefit from a single settlement later in the parliament. 

One of the key asks from our Apprenticeship Levy position paper was reflected in the Conservative’s government’s decision to increase the amount of funding that employers who pay the levy can pass onto other businesses in their Apprenticeship Levy reforms. We welcomed the Labour Party’s commitment to a much broader and more flexible Growth and Skills Levy in their manifesto, and the creation of Skills England, an important step in ensuring the skills needs of the future are met, something we have been calling for with our work alongside the Financial Services Skills Commission. 

We have highlighted the need for investment in infrastructure across the UK in our ‘Enabling growth across the UK’ report and it was great to see the Chancellor commit to several rail projects to link key centres of economic activity, including confirmation that HS2 will extend to London Euston, in the Autumn budget. We were also pleased to see the Chancellor announce action to ensure the planning system supports public and private investment, something we called for in our budget submission.

Green and sustainable finance 

Highlighted the critical enabling role of our industry in supporting the delivery of the goals of the Paris Agreement and advocated for greater partnership between the public and private sectors at COP29. We hosted several events at COP29, including a reception in partnership with British Embassy in Baku and the City of London Corporation on UK leadership in sustainable finance, where the Minister for Development gave a keynote speech. We will build on this collaboration to engage with the government on the detail behind the UK's new climate commitment for 2035. 

Inputted into the Transition Finance Market Review (TFMR) by providing a submission to the TFMR call for evidence. Our response set out recommendations to create a more supportive ecosystem for transition finance in the UK and highlighted the key barriers to accessing and deploying transition finance. 

Led the discussion on carbon markets, presenting recommendations to government and other key stakeholders on how to scale up carbon markets and position the UK to become a global leader in this area. We also responded to IOSCO’s work on voluntary carbon markets, highlighting the need for guidance to follow existing best practices and a focus on measures to support the integrity of the market and build greater market confidence.