RELEASE: Bim Afolami MP Publishes Financial Services Levelling Up Report

Hitchin & Harpenden’s Member of Parliament Bim Afolami, who chairs Parliament’s All Party Parliamentary Group on Financial Markets and Services, has put his name to a new report (Banking for Britain: The role of financial services in levelling up) published by Public First which examines the role that the financial services sector can play in driving forwards the Government’s levelling up plans.

The report highlights the role that financial services plays in levelling up – from providing business finance for growth; to insurance of business space; to overflow facilities for cashflow. Mr Afolami notes that whilst financial capital is identified as an essential part of delivering levelling up in the Government’s White Paper, his report fills in a gap in that work by fleshing out the role financial services can play.

In the report, sixteen solutions are given for policy changes which would ensure financial services plays its full part in levelling up:

1. The Government should directly incentivise financial firms and others to create and relocate senior roles outside of London, particularly as part of  new plans for Investment Zones.
2. The Government should develop a cross-departmental strategy for how remote working can boost economic growth and support levelling up, in financial services and the wider economy.
3. The financial services industry should invest in building the capacity of financial services hubs around the country through better structures for regional collaboration, advice and advocacy.
4. The Financial Services and Markets Bill should be amended so that the new secondary regulatory objective for financial regulators is explicitly focused on delivering growth for all regions of the UK.
5. The Government should expand the remit of the Office for Investment to focus on how to unlock greater volumes of domestic growth capital, particularly from pension funds, to support levelling up.
6. The Prudential Regulation Authority should reform rules around capital concentration to enable the growth of UK only challenger banks and incentivise the spread of lending across the UK.
7. The Government should rationalise the structure of its development funds to create a simplified hierarchy of local, regional and national funds.
8. Companies in the financial services industry should delegate a greater proportion of personnel decisions to regional offices, in order to retain and cultivate local talent.
9. The Government should use its review of the Apprenticeship Levy to build greater flexibility into the system and give businesses greater discretion over how funds can be used.
10. The Department for Education and local government should integrate financial education into the new Multiply adult numeracy programme.
11. The Banking Hub programme should use the rollout of banking hubs to pilot how a wider range of services can be delivered through bank branches, including public services and advice for communities.
12. The FCA, Treasury and the financial services industry should jointly work on proposals that will help fill the gap in affordable finance, by growing the community lending sector and incentivizing mainstream lenders to provide alternatives to high-cost credit.
13. The Government should use its forthcoming review of the Consumer Credit Act to develop new standards for how financial products are described, rooting this in language that is accessible to those with weak financial literacy.
14. The Government should make future devolution deals and the Government funding associated with them formally contingent on securing private sector investment.
15. The financial services industry should create a secondment scheme in partnership with local government, enabling the movement of staff between firms, Combined Authorities and other government bodies, to share expertise on financing and investment.
16. The financial services industry should explore the creation of a new scheme which pools anonymised data on financial transactions and investment with data from the Treasury and other government bodies to create insights into the economy for local leaders and policy makers.

Bim Afolami MP said,

“At its core, levelling up means trying to ensure that government policy tries to ensure that we bring out the talent in every individual, every household, every business or potential business, and every community all over the country. This talent is spready evenly, but opportunities to progress are not.

“Public spending definitely has a role in this. Yet allocating public spending slightly differently will not be sufficient to change what is primarily a need for economic regeneration and rejuvenation in every corner of the UK; led by the private sector.

“For the private sector to lead it will need financial services to play their part. Financial services are not just the jewel in the crown of the British economy, but they are critical to the effective working of the “real” economy. To the business owner, financial services provides the insurance necessary for the office building, the equity required to fund the expansion into new markets, the overdraft to manage the cashflow during a tough month. Financial services are crucial.

“As Chair of the All-Party Parliamentary Group on Financial Markets and Services, it has been a pleasure to work with industry, policy thinkers, government officials and Parliamentary colleagues from all Parties on this substantial piece of work. Financial services have a critical role to play in delivering levelling up and spreading opportunity and I will work closely with Ministers to realise the recommendations in this report.”