How we communicate the austerity message to the financial services sector is vital to its continued engagement in the UK economy

The overreliance of the UK economy on the financial services sector is over exaggerated when compared to single sector economies, such as the oil dependant Middle Eastern states. However, its rehabilitation is vital to the future prosperity of the country.

The economies of the GCC (Gulf Cooperation Council), notably Abu Dhabi, are clear in their objectives for the transformation of their economies. Abu Dhabi’s Economic Vision 2030 sets a course for the development of a modern, diverse economy, to pave the way for the day when the oil wells run dry, which incidentally is way beyond this date. Clearly, this means moving away from the Emirate’s current over-reliance on oil and petrochemicals and into other sectors previously monopolised by the more developed economies. This includes financial services.

There is a big difference in the way this message and the austerity message to the UK financial services sector has been communicated. While the Emiratis realise that the prosperity born out of the oil wells is finite, they have sought to communicate the message that in the medium term, the diversification of their economy means growing other sectors to overtake the current contribution of oil to GDP, rather than reducing and replacing the contribution and prominence of the sector that has been their lifeblood.

In the UK, we have seen the bank levy, bonus tax and talk of more hits to come on this vital sector. While some argue that the financial services sector has penance to pay for its role in the recession, the UK will only maintain its position in the global economy by maintaining favourable trading conditions for these institutions in the UK. In a mobile, modern, global economy, where you are physically situated is not as important as it used to be. If we are to keep the financial services institutions situated and paying taxes here, we need to communicate the message to them that we understand that their existence here could be finite and that we want to grow our economy with them, not in spite of them.