Speech at the Mansion House
Immigration is key to attract global talent
This is an abridged version of a speech given to a Mansion House packed to the rafters with 350 members of the International Bankers and their friends.
My year as Master (Chair) runs till October 2020.
Welcome all to the Annual Banquet of the WCIB and welcome to the Mansion House, the Heart of the City.
The Mansion House reminds me of the Villa Farnesina in Rome, built for Agostino Chigi, a banker who was treasurer to the Papal States in 1510 and a patron of great artists. He entertained his clients – Popes, Ambassadors, men of power – in such style that he was known as ‘the Magnificent’.
I should hope we have entertained you in such style today, that you too will say the International Bankers are Magnificent!
At one banquet, in an extravagant gesture, the silver dishes were thrown into the Tiber River after use. I therefore ask you to pick up any silver left on your tables and we shall throw it into the Thames. Or perhaps not!
Rumour has it that il Magnifico’s servants had placed invisible nets in the river, and thus recovered the silver.
Banking, and financial services in general, is about covering your risk. As he did.
The City faces many risks. Today, I want to concentrate on one risk only. Arguably the most crucial one. The war for talent.
Mark Hoban, a former City Minister - who is present tonight - chairs the Financial Services Skills Taskforce, which published a damning report last month on the City’s talent recruitment and retention. I quote: “There is no doubt that the financial services sector is facing an existential skills crisis.”
The demand for talent already exceeds supply and this trend is set to become more acute. Additionally, “The lack of gender and ethnic diversity is both a social issue and a skills issue. Talent that the industry needs is not being utilised.”
This is the reason why Professor Grace Lordan from the London School of Economics – also here tonight - and I are co-founding The Inclusion Institute at the LSE. The Institute arose out of a report commissioned by the International Bankers. In partnership with City companies, the Institute will use behavioural science and data to lead to more diverse talent recruitment and retention, to dynamism and creativity, and to changing culture for future success.
Cognitive diversity is necessary to deliver better company returns in a transformed digital marketplace. How does this innovation happen? It is most likely to occur when you mix gender, generation, ethnicity, sexual orientation and nationality, on your boards and in your teams. And ensure they feel accepted, or included, and thus able to speak up.
The City is working hard on its D&I. Yet it is already a world leader in one form of diversity. Nationality. We have a wider mix and more nationalities in the City than in any other major financial centre. 40% - that is four zero – of City workers are foreign-born – and they are fully included.
What other country would have a Canadian leading its central bank, a Frenchman till recently leading its stock exchange, and an American woman, leading one of its main financial derivative companies, IG? Plus, at a much lower level, voting in another foreigner – me - as Master of the Worshipful Company of International Bankers. I am grateful!
But the City’s USP is under threat. The government’s recently announced, hard core policy on immigration is undermining the City’s search for talent. They should care, because we bring in over 10% of tax revenues.
We would not have the strongest Fintech sector in the world, without the Open Door, Open City policy of earlier governments. We wouldn’t be leaders in Green Finance without that Open Door, Open City policy. Note that the UK Green Bond market is already worth $44 billion. There is so much more that we in the City need to do to help finance the environmental transition for our planet’s survival.
For that, we need the best talent in the world.
There are at least three things wrong with the new system.
In the first place, an immigration policy that gives way too much importance to higher education, such as PhDs, cannot be right. Skills are of as much importance as a university degree in our disrupted world. The Russian founder of Revolut, a City-born start-up which was just given a valuation of $5.5 billion dollars, doesn’t have a PhD. Let alone the Richard Branson’s of this world. Or even the Mark Zuckerberg’s.
Secondly, an immigration policy that harks back to an era of central planning cannot be right. Five-year plans surely went out with Stalin?!. Yet a Tory government believes in the future it will be able to figure out where the skills shortages are in the economy and make short term changes to policy to fill them. That’s in a world where we don’t even know what many of the jobs of tomorrow will look like.
And finally, an immigration policy which will only allow large, well-capitalised firms to import foreign workers, is not right. The cost and bureaucracy of work permits is such that SMEs, start ups and the like won’t be able to afford them – and they are the accelerator in the economy.
Let my last quote be from Catherine McGuinness, the CEO of the City: “We need an immigration system that works for the whole of the financial services ecosystem. This includes those supporting industries which keep the City ticking and we look forward to engaging with the Government on this particular issue.”
I am not sure she meant that last line…
The City understands that this government has an obligation to those who voted it in, a number of whom believe that immigration – rather than globalisation and automation - is to blame for inequality and the precariousness of modern jobs. But Boris Johnson’s government has a duty to destroy myths about immigration and a duty to care for the City, let alone the whole economy. Our tax revenues and our inventiveness will help in financing a better future for all.
The City is a British jewel, a European jewel, and a world jewel – in fact, it is a public good and I would ask that you join with me, in any way you can, in pressing this government to change its policy, and return to an Open Door, Open City.