Follow the latest updates on Expo 2020 Dubai here
Britain's new Sovereign Investment Partnership with the UAE will attract more investment into the City of London and offer opportunities for British FinTech firms to set up in the Emirates, according to the leading representative of the UK financial hub.
Lord Mayor of the City of London William Russell said the recent Partnership for the Future between the UAE and the UK, which saw at least £10 billion committed to Britain’s technology, infrastructure and energy transition, will help the UK enhance its financial services offering across the globe.
Mr Russell's comments came ahead of his trip to Dubai Expo 2020, to speak at a seminar on sustainability on Tuesday hosted by the UK pavilion, days after the event opened to the world.
“The whole relationship with the UAE, which has always been strong, has gone to another level with the £10bn investment, so I am going there with a very positive view and a strong friendship,” Mr Russell told The National.
“There is a very strong relationship with the City and we want to continue to enhance financial professional services around the world.”
Mr Russell's trip to the Emirates is his first since the last lockdown in England was lifted. He said he will “re-establish the relationships” he forged during his previous visit to the Emirates in February 2020, with his trip to the Expo site a key element.
“The Expo is very important for the world and the UAE. It was the right decision to delay it but there will be a lot of people coming to town,” he said.
“It’s very, very exciting for the UAE and Dubai to showcase what's going on in the world and the UK pavilion is a great opportunity for us to promote the global UK.”
Key ties between the financial hubs
During his visit, Mr Russell will meet key officials from UAE entities such as Abu Dhabi Global Markets, Masdar and Abu Dhabi Investment Authority. Accompanying him will be Lord Mayor elect Vincent Keaveny, a lawyer who will become the 693rd person to serve as ambassador for the UK's financial and professional services later this year.
“In a way, that just shows how important this region and the UAE is to us,” Mr Russell said, adding that the new pact between the nations will lead to more two-way investment in the financial services sector.
There are more than 6,000 UK-registered companies in the UAE – those registered, banked and taxed in the UK – with Mr Russell expecting this figure to grow, particularly in the FinTech sector, with the new partnership helping to set up the UAE as hub and “a stepping stone to other markets out from the UAE”.
The Partnership for the Future also includes a pact to tackle illicit financial flows between the UK and the UAE, with a pledge to work more closely to enhance the security and prosperity of citizens.
At the time of the deal, Minister of State Ahmed Ali Al Sayegh said the UAE “stands with the UK in the global fight against illicit finance”.
“We are committed to stamping out terrorist financing and serious and organised crime in all of its forms to protect the UAE and uphold the integrity of the international financial system,” he added.
Mr Russell said the UK’s regulator, the Financial Conduct Authority, works closely with other regulators around the world, with money laundering checks key to the smooth running of the City.
“We will continue to work closely with the regulator in the UAE and other partners to make sure that we can clamp down on that. Sharing expertise is key and if we can have the same standards around the world, then that only helps what we're trying to achieve,” said Mr Russell.
Cop26 and the City's green shift
“That goes the same for the taxonomy around climate change and green finance. Hopefully out of Cop26, we can create this global rulebook that we're all be looking at and working towards.”
Mr Russell plans to boost awareness of the UN Cop26 environmental summit, which is being hosted by the UK in Glasgow in November, while also praising the UAE’s “leadership on sustainability”.
“You've got 50 per cent of emissions being cut by 2030 and we want the UAE to continue to do that. By showing that leadership, it can influence the rest of the region, which is absolutely critical.”
Mr Russell co-hosted the Green Horizon Summit at Mansion House in the City of London last year with former Bank of England governor Mark Carney. This ran virtually in the run-up to the original date set for the Cop26 event, which was delayed due to Covid.
“It was a real success story and it made people wake up to the fact that without finance, we will never get close to what we're trying to achieve in the net zero emissions. Green finance is a huge opportunity for the City,” he said.
Britain sold £10bn of its first green government bonds earlier this month after attracting more than £100bn of demand from investors – a record high demonstrating the clamour for assets that can be marketed as good for the planet. Proceeds from the sale will be set aside for projects such as offshore wind farms and zero-emission buses.
“The £100bn in demand did not surprise us in the City because we've always felt the demand was there,” said Mr Russell.
“The amount of capital flowing into the sector is enormous. Now we've got to find the projects to invest in so people can get a good return on their capital. But there's no shortage of capital, and it will be private and public finance coming together to take advantage of the opportunities in the sustainable world.”
While the pandemic saw Mr Russell work from his Cambridge home until he returned to his official residence at Mansion House on April 12, the return to the office for the rest of the City has been more staggered.
Many employers have opted for a hybrid model with staff based in the office three days a week with the other two spent at home.
“The atmosphere is much better in the City,” Mr Russell said, comparing it to the situation in February when just a handful of staff came to their offices.
With most companies choosing to have staff in on Tuesday, Wednesday and Thursday, Mr Russell said office footfall on those days can hit up to 50 per cent.
“It's not the 525,000 people coming into the City every day we had in February 2020. But we're slowly getting there. We probably need a bit more of a lead from government encouraging people to come in,” he said.
“Anecdotally, I ask people how busy their train was and they all say 'busy'. Then about two weeks ago, I went to the Pret A Manger [sandwich shop] down the road on a Tuesday, and it was sold out. They were caught out, so you can feel it coming back.”
At Mansion House, Mr Russell said staff are asked to come in three days a week, with at least one of those days a Monday or a Friday. However he expects more companies to push their staff for higher office attendance.
“We know what Goldman Sachs want,” he said, referring to the US investment bank's decision to order all of its staff back to the office.
Living with Covid and Zoom calls
“For the young and for mentoring, it makes a big difference. Those quiet conversations around the water cooler mean a lot and financial services as a whole will benefit from people being here five days,” Mr Russell said, adding that the City should return to pre-pandemic levels “sometime next year”, as confidence builds back.
“People feel more comfortable and are saying, ‘Well, you know, I can travel on the train and I'm not going to catch Covid but if I do, I’m not going to be in a hospital.' It will just get rather like flu and we just have to live with it.”
Mr Russell, took on the unpaid role to run the Square Mile in 2019, staying on for a second term in November last year to provide continuity during the pandemic – only the second mayor to serve two years.
His successor Mr Keaveny, a partner at DLA Piper, will start work in November, spending about 100 days over the next year overseas on behalf of the finance industry.
“I started my time in November 2019 and then we had Brexit in January 2020 and Covid in March 2020, so to have Brexit and Covid as Lord Mayor is reasonably unique,” said Mr Russell. “Since March 2020, I've done over 2,500 Zooms but I probably reached more people than anyone else. That's part of how the world's changed, so in a way the Office of Lord Mayor has probably got to a much wider world.”
