Written evidence from the City of London
Corporation
INTRODUCTION
1. This memorandum is submitted on behalf of
the City of London Corporation in the context of its role in promoting
and reinforcing the competitiveness of the UK-based financial
services sector, for which "the City" is now commonly
used as shorthand. The City engages closely with professional
services and other businesses in carrying out its overseas visits
and works to represent businesses across the UK. The City Corporation's
promotion of London and the UK as a centre for business and finance
is spear-headed by the Lord Mayor who, in collaboration with the
Foreign & Commonwealth Office and UK Trade and Investment,
leads business delegations to financial markets around the world.
In this capacity the City engages with emerging as well as established
financial centres. The City Corporation also supports TheCityUK—an
independent body recently created, with Government and industry
support, to promote the UK's financial and professional services
sector.
2. The "Square Mile" is internationally-owned,
internationally-managed and internationally-staffed. Much of the
business done could be undertaken in other centres where the two
key factors, capital and expertise, are present. Nevertheless
the fact that it is done in London and elsewhere in the UK has
positive benefits for the UK in terms of corporate profits, tax
receipts, employment and export earnings.
CONSULTATION
3. Especially given the spending constraints
set out in the 2010 Comprehensive Spending Review, how—if
at all—could the FCO better organise and utilise its financial
and human resources so as to fulfil its role?
- The City Corporation accepts the need for the
spending constraints in the CSR and the consequent requirement
to rationalise resources deployed in overseas Posts. It is however
suggested that this should not be seen as a one-way process: the
world economy is changing shape and focus rapidly and it is likely
that new centres of political and commercial importance will emerge,
requiring new or additional resource to promote and protect British
interests. This evidently applies today to Asia. The Lord Mayor's
and City Corporation's programme of visits is well placed to help
UKTI and FCO maximise their impact in overseas markets.
4. How does the FCO work across Whitehall; Are
the FCO and its resources organised so as to facilitate cross-Government
cooperation?
- The City Corporation welcomes the FCO's new focus
on trade and investment issues. It is however important that UKTI's
existing role in supporting and engaging with business should
not be overshadowed by its larger parent department, and that
the complementary roles of BIS and HM Treasury (with its particular
focus on financial services and the encouragement of capital flows)
should also be recognised. From the City's perspective it would
be particularly valuable if the FCO's stepped-up engagement in
this area could focus on building on the intelligence it generates,
the opportunities it opens up and ensuring that commercial issues
are more fully integrated with the political agenda. The distinction
between departments is not significant to overseas stakeholders
dealing with staff at Post, and City businesses and stakeholders
look for a similarly joined up approach in the UK—ideally
UKTI as the lead body dealing directly with them, and engaging
the wider scope of FCO, BIS and HMT capacity on a more strategic
level.
5. What should be the role of the FCO's network
of overseas posts?
- The City Corporation works closely with the FCO's
overseas posts in support of a number of objectives:
- The promotion of the UK based financial and professional
services industry and work to break down barriers to market entry
for international firms. The Lord Mayor as de facto ambassador
for the UK based F&PS industry will travel to around 25 overseas
markets and 36 cities promoting the industry. On each visit the
Lord Mayor heads a relevant and targeted delegation chosen to
reflect issues relevant to the host country. The business group
invariably comprises CEO and senior practitioner level members—by
way of example, the London Stock Exchange chairman, alongside
a small high-powered team, accompanied the Lord Mayor on a recent
trip to India. FCO and UKTI staff in overseas Posts own, manage
and deliver these programmes in market, and further support the
accompanying business delegations that join these visits. Each
visit seeks to advance FCO/HMG policy objectives as well as those
of the business community.
- The promotion of opportunities to influence senior
visitors to the UK, in support of UK objectives. The City of London
host a large throughput of senior decision makers (both Government
and business) to promote the strengths of the City and facilitate
introductions to UK-based financial and professional services
firms.
- The overseas post network provides valuable intelligence
on changes in regulation, legislation and economic developments
throughout the globe—the City Corporation on behalf of professional
services, and with a view to maximising efficiency of resources,
would welcome the ability to tap more easily into this flow of
relevant information.
- The City Corporation believes that overseas posts
need to retain a strong focus on promoting British business in
terms of both attracting enhanced levels of foreign direct investment
and identifying and supporting trade development opportunities.
Overseas posts need to be staffed and resourced with a high calibre
of staff, with the ability to break down market access issues
and set them in the wider politico-economic context as the UK
seeks to stimulate a trade driven recovery.
- There is considerable value added to business
promotion by high quality economic reporting. It is desirable
that economic and trade intelligence amassed by Posts should have
a wider distribution than it currently receives.
- High level engagement at post on business issues
by Political and Economic staff—including Heads of Mission—adds
huge value to the UK's trade promotion. The City Corporation is
greatly encouraged by signs of such engagement among many of those
currently occupying Head of Mission and other senior roles, and
hopes that the "new commercial diplomacy" will reinforce
this focus.
- It is essential that FCO Posts retain a sense
of ownership over the issue of business visas for short-term business
visitors to the UK. While it is accepted that the management of
this system has been "contracted out" and the responsible
home department is UKBA, the prompt and efficient issuing of visas
to legitimate business visitors is essential to our commercial
interests, and reinforces the perception that the UK is indeed
"open for business". Delayed, inefficient or unnecessarily
prescriptive treatment of applicants can in contrast leave a lasting
bad impression. Better co-ordination on visa issues, and recognition
of the importance of commercial priorities (for example, staff
of an inward investment target or major investor), could make
a large difference—but the responses of UKBA and UKTI often
seem to be at odds. HMG should also be aware that in other countries,
there is significant discretion over the granting of visas—treating
this simply as a processing issue is detrimental to wider trade
and business engagement efforts.
2 December 2010
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