Business Leaders Summit 2017


Britain's future as a trading nation, upgrading digital infrastructure and cybersecurity were key themes at the fifth Lloyds Bank Business Leaders Summit at The Savoy in London. An audience of business leaders heard a series of insightful speeches and panel discussions from prominent figures in the worlds of politics, business and economics. They also heard results and analysis from the annual Lloyds Bank Business Leaders Survey, which was released on the morning of the Summit.

Opening the Summit, Clare Francis, Managing Director, Head of Global Corporates, at Lloyds Bank, said companies remained resilient in their focus on achieving business growth in challenging times. The Fourth Industrial Revolution was making "the need for strong and differentiated leadership to drive Britain's prosperity ever more apparent," she added.

She also highlighted key findings from the Survey, including:

  • 43% of business leaders expect global economic conditions to deteriorate in the next 12 months compared to 29% a year earlier
  • 62% are not confident that the UK government will protect and promote the interests of British businesses in Brexit negotiations
  • Upgrading digital infrastructure has replaced upgrading airports as business leaders' number one infrastructure concern
  • 86% are more concerned about the risk of cybercrime to their business than they were a year ago

BLS 2017

Trade and Britain's economy

Dr Liam Fox, Secretary of State for International Trade, George Osborne, the former Chancellor of the Exchequer, and Dr Gerard Lyons, an independent economist and co-founder of Economists for Brexit, all gave their views on the UK's future outside the EU. In his speech, Dr Fox said working closely with business leaders and making exporting the norm would be key to success.

"The need for strong and differentiated leadership to drive Britain’s prosperity is ever more apparent."

Clare Francis, Managing Director, Head of Global Corporates, Lloyds Bank

Our Business Leaders Survey found that most business leaders are not confident the government will protect their interests in EU negotiations. But Dr Fox said: "Every effort we make is in support of your private enterprise – the driver of this country's prosperity." He also thanked Lloyds Banking Group for its "commitment and dedication" in promoting British business abroad, saying its work with UK Export Finance had supported nearly £700m worth of contracts in the past five years.

Dr Fox said government would work in partnership with business to improve the UK's export performance and called for the "freest possible trade" with EU member states. Lord Blackwell, Chairman of Lloyds Banking Group and a Summit panellist, was also optimistic and emphasised that access to the European single market does not depend upon being a member, although the terms would be subject to negotiation.

Mr Osborne said neither side was prioritising the economy in Brexit negotiations, since the UK's "red lines" were on immigration and sovereignty while Europe is most concerned with preserving the EU. "It's going to be like a divorce: it's going to be about access versus money," Mr Osborne predicted. He noted that Chinese president Xi Jinping had positioned himself as a champion of free trade in "quite deliberate contrast to Donald Trump" and doubted whether agreeing a trade deal with the US would be easy.

Paul Drechsler, CBI President, said too much urgency for new trade deals could obscure the fact that it's more important to get good deals than quick deals. Fellow panellist Warren East, Chief Executive of Rolls-Royce, said Brexit negotiations must not overlook the "ecosystem" of companies with supply chains that cross European borders. But Kamal Ahmed, BBC economics editor, said President Trump's tough stance towards the EU might help the UK in negotiations, asking: "Does the EU want a fight with two of the six largest economies in the world?"

Dr Lyons disputed the idea that the UK government is "downgrading the economy". "We need to think globally – 90% of global growth in the next couple of decades will come from outside the EU," he said. The UK could "copy or better" the successful trade models of Singapore or South Korea, Dr Lyons told the audience.

Infrastructure: business leaders demand digital upgrades

Speakers on the Summit's 'Building a Stronger Britain' panel reinforced the finding in the Lloyds Bank Business Leaders Survey that improving digital infrastructure must be a top priority. The UK is a "laggard" in terms of fibre optic connections providing high-speed broadband to businesses and homes, said Simon Beresford-Wylie, Chief Executive Officer, Arqiva. "If we aspire to have a vibrant and globally competitive digital economy at the cusp of the Fourth Industrial Revolution, we really need to get this sorted," he warned. Robert Noel, Chief Executive, Land Securities, said whether a journey takes 60 or 90 minutes won't matter in future, adding "what matters is that you can contact people instantly."

Leo Quinn, Chief Executive, Balfour Beatty, said projects such as HS2, Crossrail, flood defence schemes and expansion of Heathrow showed a strong infrastructure pipeline but added that "long-term commitment to investing in skills and capability" was now vital. Sir Terry Morgan, Chairman of Crossrail, emphasised the need for "continuity" in infrastructure programmes. "We debate things forever and it costs time and money and also loses momentum from a political point of view," he said. Dr Lyons also identified infrastructure spending – including digital – as one of '4Is' he called for the UK government to focus on. The others were:

  • More investment – from the private sector but enabled by government
  • More innovation – particularly focused on clusters led by universities
  • The right incentives – to tackle housing problems, for example

Dealing with market volatility

Quantitative easing has been supporting markets and financing capacity but policymakers know it cannot last forever, speakers from Lloyds Bank told the audience. James Garvey, Managing Director, Head of Commercial Banking Markets, said companies needed to take a "safety first" approach by hedging against volatility in credit markets, interest rate markets and FX markets. Nick Burge, Managing Director, Head of Global Corporates Structural & Regulatory Solutions, added that volatility was likely to continue as underlying market liquidity had reduced, and we should expect more "flash crashes" as robot traders operate in ever more digitalised markets.

The Summit also heard how the Lloyds Bank Global Corporates team, which covers Europe, Asia and North America, is giving clients the support they need to pursue their goals. "We link into the full breadth and depth of all Lloyds Bank's client relationships on behalf of our 1,300 large corporate clients," said John Feeney, Managing Director and Global Head of Commercial Real Estate.

The cybersecurity challenge

Business leaders are far more concerned about cybersecurity now than they were a year ago, according to the Business Leaders Survey. Paddy McGuinness, Deputy National Security Adviser, Intelligence Security and Resilience, said it was vital for national resilience that businesses protected themselves against cyber threats. He said government investigations in 2015 had found that almost 80% of cyber attacks were "eminently preventable". Boards must know what company data matters most, how they will respond in the event of an attack and should actively practice that response, Mr McGuinness advised.

Opportunities in uncertainty

António Horta-Osório, Executive Director and Group Chief Executive, Lloyds Banking Group, closed the Summit on a positive note as he pointed to sound UK macroeconomic fundamentals. He acknowledged that economic and political uncertainties remain. But António Horta-Osório added: "Uncertainty creates opportunities and I firmly believe that if we grasp these opportunities together we can help Britain prosper."

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