Executives in the City of London are hoping a new government would give them more attention and stop years of political turmoil as Britain gets ready to go back to the polls.
Business executives in London's financial community seem more at ease than normal over the outcome of the July 4 vote, even if there is little chance that it will bring back the first Labour Party prime minister in almost 14 years and end the right-of-center Conservative Party's control.
Former Conservative prime minister Boris Johnson, who had previously downplayed businesses' fears about exiting the European Union, was a source of hostility for the financial community.
Although ties between the government and the finance sector of the City of London have subsequently improved, the industry that accounts for almost 12% of all UK tax revenues has suffered due to Brexit, political unrest, and economic uncertainty.
It is not forgotten that Prime Minister Rishi Sunak's Conservative predecessor, Liz Truss, implemented a disastrous'mini-budget' in September 2022 that caused government bond rates to rise.
Although foreign investment in the UK's financial and professional services fell by half last year, the London stock market is having difficulty attracting new listings, despite the country still being one of the top destinations in the world for financial investments.
On Thursday, a two-story beach club in Spain collapsed, leaving many people dead and over a dozen injured.
"It’s encouraging that the huge value of the City to the UK economy is recognised on a cross-party basis, as is the need to proactively ensure that the UK retains its status as one of the world-leading capital markets," said Matthew Ponsonby, UK head of global banking for BNP Paribas.
Executives in the finance sector are hoping that a new administration would focus on changes that will make the City more globally attractive and competitive in the fight against rivals, as well as move to release pension funds for much-needed long-term investments.
"Whoever wins in July, they must not take their foot off the pedal of constructive reform," stated Ponsonby, citing as an example the long-standing City annoyance of stamp tax on UK share trades.
Executives and lobby organisations noted that opposition leader Keir Starmer, who leads by a wide margin in surveys, had stocked his upper echelons with lawmakers amenable to the objectives of the business.
Labour has courted the City, referring to it as the "crown jewels" of Britain, and has established a regular communication channel with investors and banks about the changes proposed by the Conservative government to increase the industry's competitiveness after Brexit.
While Labour's plan for the City seems to have incorporated some of the government's changes, a lot may still change as the election draws near.
Similar to the current administration, a Labour government would have to deal with severely constrained public budgets and rely on private investors to assist finance the substantial expenditures necessary to fulfil objectives on housing and energy transition.
"It's about recognising the really important role that financial services play in the economy," said Amanda Blanc, CEO of insurer Aviva. "We have a real vested interest in the future success of the UK and long-term investment, and that is what we just want, respect for financial services."
Top on CEOs' wish list for a new government is a renewed campaign to allow British institutional investors to allocate more of their capital to homegrown infrastructure and businesses.
Aviva has advocated for changes aimed at eliminating the European Union's Solvency II regulations, which have hindered UK insurers' involvement in infrastructure projects such as roads and airports.
In the previous four years, the corporation has invested 9.5 billion pounds ($12.1 billion) in UK infrastructure assets, but Blanc said that this was only the beginning.
Encouraging pension sector investments in infrastructure should be a top priority, according to Nicholas Lyons, the chair of the British insurer Phoenix and a former Lord Mayor of the City of London.
"The important thing is to make a positive commitment to enabling financial services companies to do what they are designed to do, which is to take on risk," he said.
A potential change of administration is also seen positively by British banks and their investors, with early worries about windfall taxes not materialising.
A plan to raise billions of pounds through the sale of taxpayer-owned NatWest shares will also be passed on to the next finance minister.
"While we await the party manifestos, the early commentary from Labour suggests the risk of a major shock to the industry is limited and that any announced taxes and surcharges will be manageable," said Chris Weston, head of research at financial services group Pepperstone.
"The fact that UK banks have largely been a good place for investors to hide out through Q2, notably as the polls show such a sizeable lead for Labour, suggests equity investors have limited concerns about a change in government."
(Source:www.reuters.com)
Business executives in London's financial community seem more at ease than normal over the outcome of the July 4 vote, even if there is little chance that it will bring back the first Labour Party prime minister in almost 14 years and end the right-of-center Conservative Party's control.
Former Conservative prime minister Boris Johnson, who had previously downplayed businesses' fears about exiting the European Union, was a source of hostility for the financial community.
Although ties between the government and the finance sector of the City of London have subsequently improved, the industry that accounts for almost 12% of all UK tax revenues has suffered due to Brexit, political unrest, and economic uncertainty.
It is not forgotten that Prime Minister Rishi Sunak's Conservative predecessor, Liz Truss, implemented a disastrous'mini-budget' in September 2022 that caused government bond rates to rise.
Although foreign investment in the UK's financial and professional services fell by half last year, the London stock market is having difficulty attracting new listings, despite the country still being one of the top destinations in the world for financial investments.
On Thursday, a two-story beach club in Spain collapsed, leaving many people dead and over a dozen injured.
"It’s encouraging that the huge value of the City to the UK economy is recognised on a cross-party basis, as is the need to proactively ensure that the UK retains its status as one of the world-leading capital markets," said Matthew Ponsonby, UK head of global banking for BNP Paribas.
Executives in the finance sector are hoping that a new administration would focus on changes that will make the City more globally attractive and competitive in the fight against rivals, as well as move to release pension funds for much-needed long-term investments.
"Whoever wins in July, they must not take their foot off the pedal of constructive reform," stated Ponsonby, citing as an example the long-standing City annoyance of stamp tax on UK share trades.
Executives and lobby organisations noted that opposition leader Keir Starmer, who leads by a wide margin in surveys, had stocked his upper echelons with lawmakers amenable to the objectives of the business.
Labour has courted the City, referring to it as the "crown jewels" of Britain, and has established a regular communication channel with investors and banks about the changes proposed by the Conservative government to increase the industry's competitiveness after Brexit.
While Labour's plan for the City seems to have incorporated some of the government's changes, a lot may still change as the election draws near.
Similar to the current administration, a Labour government would have to deal with severely constrained public budgets and rely on private investors to assist finance the substantial expenditures necessary to fulfil objectives on housing and energy transition.
"It's about recognising the really important role that financial services play in the economy," said Amanda Blanc, CEO of insurer Aviva. "We have a real vested interest in the future success of the UK and long-term investment, and that is what we just want, respect for financial services."
Top on CEOs' wish list for a new government is a renewed campaign to allow British institutional investors to allocate more of their capital to homegrown infrastructure and businesses.
Aviva has advocated for changes aimed at eliminating the European Union's Solvency II regulations, which have hindered UK insurers' involvement in infrastructure projects such as roads and airports.
In the previous four years, the corporation has invested 9.5 billion pounds ($12.1 billion) in UK infrastructure assets, but Blanc said that this was only the beginning.
Encouraging pension sector investments in infrastructure should be a top priority, according to Nicholas Lyons, the chair of the British insurer Phoenix and a former Lord Mayor of the City of London.
"The important thing is to make a positive commitment to enabling financial services companies to do what they are designed to do, which is to take on risk," he said.
A potential change of administration is also seen positively by British banks and their investors, with early worries about windfall taxes not materialising.
A plan to raise billions of pounds through the sale of taxpayer-owned NatWest shares will also be passed on to the next finance minister.
"While we await the party manifestos, the early commentary from Labour suggests the risk of a major shock to the industry is limited and that any announced taxes and surcharges will be manageable," said Chris Weston, head of research at financial services group Pepperstone.
"The fact that UK banks have largely been a good place for investors to hide out through Q2, notably as the polls show such a sizeable lead for Labour, suggests equity investors have limited concerns about a change in government."
(Source:www.reuters.com)