Why the next Mayor matters for London’s FinTech startups

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The momentum of London’s FinTech ecosystem over the past few years has played a huge role in putting the capital’s tech scene on the global map. But unless its next mayor addresses a number of key hurdles facing companies it will stunt the city’s tech community and make it harder to launch, execute and scale the next TransferWise, Funding Circle or Nutmeg.

That’s according to the Tech Manifesto compiled by Tech London Advocates, Tech UK and think tank Centre For London, published last month and addressed by London’s mayoral candidates in a debate on Tuesday.

Unsurprisingly there was some flexing of tech credentials in the line-up with Sian Berry for the Green Party claiming to be the only candidate that has actually worked for a tech startup and Labour’s Sadiq Khan quipping that he “knows his FTTP (fibre to the premises) from his HTTP (hypertext transfer protocol). While the Conservatives’ Zac Goldsmith prefaced his speech by saying he “wasn’t much of a techie” and that the language of coding was “as alien as Swahili” to him, he lost no time highlighting the importance of tech in London’s economy.

With 85 days until the capital decides who its next mayor will be, here’s a snapshot of how the candidates (which also include Caroline Pidgeon from the Lib Dems and Peter Whittle for UKIP) plan to support the city’s digital future and how they responded to policy recommendations put forward in the manifesto.

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Key policy recommendation highlights

> Be bold on Visas
> Make broadband a fourth utility
> Shore up the supply of commercial space
> Support investment incentives
> Create an open data charter (see all 13)

Infrastructure

A key issue – and one that anyone that lives, works in and visits London will be familiar with is – the city’s poor broadband and internet connectivity. As the city’s population rises and more businesses relocate here, that’s only becoming more acute – especially in the FinTech space. While there is super-fast broadband available in the city, access is patchy and uneven creating ‘not-spots’.

Unsurprisingly this is something all the candidates see as a priority. Plans to improve the situation include Zac Goldsmith’s vision of the public and private sectors working more closely together. He says Transport for London has more than 560km of tunnels, roads and bridges that private players like mobile phone are keen to leverage. “We’ve seen investment in physical infrastructure in the last eight years under Boris Johnson but we are falling behind digitally,” says Goldsmith. Being able to connect digitally is as important for businesses today as being able to get from A to B physically.”

Sadiq Khan said: “We can’t afford not to do it” and suggested future-proofed (i.e. not likely to need updating soon) ultra-fast broadband needs to be baked into planning permission for any new commercial and residential property. Peter Whittle for UKIP said it’s “absurd” there are still places in London that don’t get signal. Meanwhile Sian Berry for the Greens pointed out that it’s not just businesses – their customers also need to have high quality access, with digital inclusion another key policy area identified by the manifesto.

Another part of the infrastructure debate focused on the availability of affordable office space – not just for small teams but throughout a company’s lifetime. From a FinTech startup point of view, London might have the advantages of a powerful finance sector, fast transport links to New York and Singapore and strong access to funding but if they don’t have anywhere to accommodate growing teams it will choke growth.

Caroline Pidgeon from the Lib Dems said she “strongly opposed” the government’s relaxation of rules that allow commercial property to be converted into residential use without planning permission: “This is seriously affecting businesses in London.”

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Talent, Immigration & Visas

Access to the best talent, ideas and entrepreneurs, is essential if London is to sustain its tech and fintech credentials moving forward. The manifesto cites a study from O2 which suggests the UK will need to fill 766,000 new digital jobs by 2020 and train 2.3m digitally skilled workers. It’s worth noting, of course, that one of the city’s most high-profile FinTech startups, TransferWise, was co-founded by two Estonian entrepreneurs.

Caroline Pidgeon made the case that maintain funding and talent, membership of the EU is essential: “It helps guarantee a steady stream of businesses that want to be located in London. It helps funding. I will be a strongly pro-European mayor. The free movement of people is vital for London’s tech sector and we don’t want a situation where London companies are struggling to recruit the best talent and bring them to work in London.”

The manifesto also calls on the next mayor to be “bold” on visas, saying London’s tech companies need a mayor who will advocate to central government that talent routes like the Tier 2 skilled worker visa be left unrestricted.

Khan backed the policy, saying he would take a stand on “unfair visa rules” that hold back companies from bringing in top global talent that benefits not just the economy but the Brits who work alongside them.

“You can’t with one hand encourage people to invest in our country and then have really unfair restrictions when it comes to Tier 2 visa requirements. We’re going overseas to ask foreigners to invest in our businesses but make it so hard for skilled labour to come to London.”

Unsurprisingly, Peter Whittle for UKIP disagreed, arguing that EU regulation “stifles” UK tech startups and businesses: “As the only candidate who believes, at least publically, that Britain should withdraw from the EU I’d like to emphasise how small and medium businesses are hampered and strangled by regulation from Brussels. Our subservience to EU regulation limits potential compared to say the US or China.”

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Access to funding

Claire Cockerton, former CEO of FinTech representative body Innovate Finance, raised the question of what the candidates would do to bring more investment into the space. Boris Johnson’s mayorship has been notable for numerous trade missions to finance clusters in places like New York and Singapore to showcase the city’s best FinTech startups and woo foreign investors.

Goldsmith emphasised the need to focus on helping tech startups scale up, as well as start up, saying: “People are not asking for direct funding from the government…they are asking for the mayor to build bridges. Under Boris we’ve become the tech capital of Europe and from Funding Circle to Farfech London’s tech companies are making global waves. Now is the time to scale up…Berlin and Stockholm are snapping at our heels.”

Sadiq Khan also acknowledged that “London’s competition is global” pointing to strengthening tech hubs from Paris to Shanghai, Tokyo to Silicon Valley.

Interestingly Sian Berry made the point that London needs to focus on building and scaling tech businesses – and keeping them here: “It’s important the that the only option when you start to grow and your order book fills up isn’t that you have to be taken over by someone from silicon valley. We need to build our own silicon valley here and I do think it’s important not just to rely on American companies to come in and finance our sector – we need to build our own.”

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