Owen Hembry

Business news editor of the New Zealand Herald

City took too much flak for crisis - Lord Mayor

David Wootton, Lord Mayor of the City of London Photo / Sarah Ivey
David Wootton, Lord Mayor of the City of London Photo / Sarah Ivey

The City of London - a hot destination for Kiwi job-seekers - was wrongly blamed for the financial crisis, according to visiting Lord Mayor David Wootton.

Wootton is the latest mayor in an unbroken chain dating to 1189 and presides over the so-called "square mile" of central London - where financial services employ hundreds of thousands of people and generate billions in taxes.

A corporate lawyer by profession most of his time is spent as an ambassador for the City and the broader UK financial services and business community.

Wootton's trip to New Zealand will include meetings with Auckland Mayor Len Brown and business groups, with discussions aimed at strengthening the relationship.

"Auckland wants to do a lot with its infrastructure, Christchurch obviously is doing a lot ...

and British business is good at designing the clever advisory functions that surround infrastructure and the physical development ... engineering, architecture, project management," Wootton said.

The City of London had been awarded too much of the blame for the financial crisis, he said.

"It should accept some of the blame but there are others involved and watching who didn't do their job either, and are quicker to the media than the City of London is," he said.

There were 300,000 people employed in financial services in the City, which directly or indirectly accounted for about two million jobs.

"While there are calls in the UK for a rebalancing of the economy ... the much better term is diversifying the economy so you get all the sectors moving forward," Wootton said.

"So there's a lot of comment the City has received but despite all that at its peak in 2007 the City of London had 31 per cent of global financial services activity - today it's got 31 per cent."

Financial services paid £63 billion ($120 billion) in taxes last year equivalent to 12 per cent of total revenue, down from 14 per cent in 2007.

The City's markets were healthy in terms of volumes and there had been a huge change in remuneration structures, Wootton said.

"They might have been at fault but they didn't cause the crisis, bad lending decisions, bad trading decisions caused the crisis ... but nonetheless there was a perception even within the City that things had got out of line.

"So that's all been changed and large cash bonuses paid immediately are out."

The Greek and wider euro debt issue was weighing a little on the City but not as much as on other parts of Europe. "The UK is seen I think as having the right idea in tackling the deficit and accepting the problems that that brings ... and we've been through worse in my view in my lifetime.

"The industrial adjustment ... in the 1980s which swept away a lot of frankly inefficient British industry was much worse in its effects than what's going on now in the UK."

The City's standing as a world leading financial hub was a major asset to both the UK and the world, Wootton said.

"I am here to stress that the UK is open for business."

DAVID WOOTTON

* The 684th Lord Mayor of the City of London.
* The City is the "square mile" in central London.
* It is a leading global financial hub.
* Financial services last year generated $120b in taxes.

- NZ Herald

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n1 at 02 Oct 2014 21:26:18 Processing Time: 869ms