Delay on airports ‘is hitting the City’

Major financial firms will stop investing in the City of London unless the Government makes a decision on the future of the UK’s airports, a report has warned.

TheCityUK, a body promoting the UK financial services industry, said that financial and investment firms are increasingly choosing to create jobs in London’s European rivals because of a lack of flight connections.

They estimate that 85,000 jobs have been lost as a result of a decline in the relative competitiveness of Britain versus other financial centres. A major reason for that decline is the lack of clarity on aviation, the report said.

TheCityUK’s Chief Executive Chris Cummings today said that the failure to build a proper hub airport in the South-East is now a concern for finance bosses looking to invest in London.

And MP for the Cities of London and Westminster Mark Field called on the Prime Minister to ensure the City remains “top dog” by reaching a decision on aviation in the next 12 months. The Government has put off any such decision until after the 2015 general election by announcing an aviation commission headed by top former businessman Sir Howard Davies.

Mr Cummings said: “The UK is losing competitiveness because of a lack of airport infrastructure.

“The political delay over new runways and having a longer-term strategy is having a detrimental effect on the UK’s competitiveness.”

Mr Cummings warned that the City is unable to take advantage of opportunities in developing Latin American countries.

“Trying to get to Latin American states is very hard, if not impossible from the UK,” he said.

“It impacts both UK companies going to Latin America and also Latin American companies feeling they have to go somewhere else before they can even reach the UK to talk business.”

He added: “The lack of flights direct to the UK means that the trade delegations are flying into other European member states first. That communicates a message, whether subconsciously or openly, that the UK isn’t as open to business from Latin America as other European member states are. There are now serious examples of companies that have not arrived in the UK because of these issues.”

He added: “Companies were saying to us, ‘We were going to put 8,000 jobs in the UK but now we are going to go to Frankfurt.”