Jeremy Hunt needs to help the private sector deliver levelling up - David Postings

This growth seen in the area is a testament to the region, and perhaps a point that much of the levelling up argument has focused on the distribution of public spending rather than the role of the private sector. Both public and private sector spending is critically important, and I think that the banking and finance sector has an important role to play in the region’s success.

We did some polling last year and found that 93 per cent of people in Yorkshire and the Humber said that the banking and finance industry is important to the UK economy, yet the industry hasn’t really been a focal point in the levelling up agenda.

To fully unleash our sector’s role in this plan, there is work to be done in terms of jobs and skills, support for financial education and some important but technical changes to capital rules.

Despite how it is often perceived, of the 2.2 million people employed in financial services in the UK, around two-thirds of these are based outside of London. There are a number of firms who are investing in the region and growing their workforce and they are being followed by important institutions: the Financial Conduct Authority has opened a new office in Leeds, the UK Infrastructure Bank has its headquarters in the city and the Bank of England is planning to open an office here too.

Across England and Wales as a whole, financial services also take on around 17 per cent of new apprentices, but firms up and down the country have repeatedly voiced their concerns about the skills gap that is hampering the economy. If firms can’t find the right skills, they aren’t as likely to invest or grow in the region.

I believe we can help address that gap and deliver more high-paying jobs by better supporting people already working in the sector to retrain or upskill. One way to do this would be for the government to give businesses more flexibility in how the apprenticeship levy is used, enabling funds to be invested in a wider range of training for the existing workforce.

Enhanced expertise in the local area also means better advice and support for local customers and businesses. To support customers more widely, we want to improve adult numeracy and financial education.

The banking and finance sector is already doing some great work to achieve this. For example, Yorkshire Building Society’s innovative scheme with Citizens Advice provides free, face-to-face independent advice to members of the public on a range of issues including financial wellbeing. The scheme is having a particular impact on those seeking support with benefits and tax credits.

Improved financial awareness and education would particularly help the 17.5 million people that are estimated to be financially vulnerable and the financial sector is leading the way here.

Financial vulnerability is concentrated in communities too, with East Yorkshire being one of the areas with the highest proportion of unbanked adults. Addressing challenges like this is key to supporting regional economies to prosper.

Alongside skills, the other important area for growth is investment. Our polling found that over half of people in Yorkshire and the Humber think that investment is unfairly distributed across the UK; if businesses here had access to more local financial services expertise, SMEs could be better supported to secure investment.

We think that more investment could be channelled into SMEs here by reforming capital rules that impact smaller and mid-sized banks. This is a technical area known as MREL, and the way it operates means it acts as a real barrier to growth for smaller lenders who aren’t able to support as many SME customers as they would like. Ultimately that is bad for competition and bad for lending.

Revising these rules would make a significant difference – it is estimated that up to £62bn of new investment could be unlocked, supporting more lending to more SMEs up and down the country.

Levelling up may sometimes be seen as a catchphrase for the government, but it’s something that is vitally important.

As well as the importance of public spending, the role of the private sector is critical in terms of providing high-skilled, high-paying jobs that will drive regional growth.

David Postings is the chief executive of UK Finance.