City centred

As the new economic secretary at the Treasury, I will continue to take a close interest in housing and construction issues - and not just because the City of London has led the way in recent decades in designing exciting and innovative buildings and good public places.

Recently I've spent hours in the committee stage of the Finance Bill debating the details of the Real Estate Investment Trusts. REITs, you may remember, are designed to remove the tax differential between investing in property directly and investing indirectly, for example though a company.

After lengthy and careful consultation, our REIT regime is designed to level the playing field. Our aim is a more efficient and liquid market for property investment, with companies able to compete equally with the many alternative investment vehicles.

And I'm encouraged by recent announcements from companies that intend to convert to REIT status next year. It's my job to ensure that the regime legislated for this year will provide a flexible platform for the market to thrive in years to come.

It is an exciting and a daunting time to be the UK City minister. These are days of unparalleled change and huge opportunity for our financial services across this country - in Edinburgh, in our regions and in London, too.

I have absolutely no hesitation when I say to you that London is - today - the world's greatest financial centre. My job is to keep an eye out for any developments that could undermine that. We can't afford to be complacent about our past successes, nor blindly assume they will continue. My job as City minister is to stand up for London and financial services around our country, in Whitehall, in Brussels across the world.

That means building on London's strengths of openness and internationalism and recognising the forces that determine business location decisions. And it means continuing to improve the UK as a location for business compared with competitor countries, investing in infrastructure and skills, but also supporting what makes London a creative, dynamic place to live.

Getting construction right in London is crucial for the City, just as a flourishing City, is critical for the success of construction

In the Budget, the chancellor spelled out our ambition for the City to become even more successful, and the steps this government will take to realise this objective. He has established a new high-level advisory group to draw up a single strategy for maintaining and promoting London's competitiveness as an international financial centre.

The lesson of the past is that even a successful economic cluster can erode over time if economic policy does not recognise and adapt to the needs of the businesses within it. To build on the success of our financial sector we must continue to deliver stability in the economy, light-touch regulation from the Financial Services Authority and listen to concerns of the industry - in areas from infrastructure and planning, to skills, immigration and tax.

All these issues are as relevant to the whole of the British economy as they are to the City. It does seem to me that the success of the City over the past decade has important lessons for other sectors of our economy.

Embracing change, being innovative and open to new ideas, encouraging ownership and talents from around the world, investing in skills and new technologies - these are the keys to success in the modern economy.

I know that getting construction and infrastructure right in London is crucial for the City, just as a flourishing City, and a strong and stable housing market, is critical for the economic success of the construction industry and the whole British economy. I'll keep you in touch with how it goes.