The Notebook: Will Labour have the City’s back?

Where the City’s movers and shakers have their say. Today, it’s Lucy McNulty, editor of Following the Rules podcast, with the notebook pen, talking politics, Brexit, and the need to celebrate the City.

Labour must celebrate the City

With Labour widely anticipated to end the week in government, concerns are growing within the City that the party does not care enough about its future. 

Sure, the party has made enough of the right noises to garner decent support across the City – its announcement in January that it would avoid tampering too much with financial services rules was roundly welcomed after years of regulatory change and Brexit turmoil. But now City bosses are hankering for more.

Saker Nusseibeh, chief executive of the London arm of US fund giant Federated Hermes, told the Following the Rules podcast that politicians in the UK’s main parties had become too “ambivalent” towards the City. He wants to see more enthusiasm. “We have in the City created an extraordinary engine of wealth creation and growth for the country,” he said. “We don’t celebrate it enough. It’s a matter of celebrating what we did.” 

It echoes comments from other influential City voices. 

Mark Austin, a partner at law firm Latham & Watkins and a veteran of several reviews into London’s listing woes, last month said politicians, regulators and finance workers alike had “a responsibility now to talk positively” about recent efforts to encourage more business to the UK’s markets. 

But this isn’t City bigwigs pushing for a collective pat on the back. This is an effort to reframe the increasingly negative post-Brexit narrative around the City’s prospects and to encourage a more rigorous promotion of the sector’s role in driving the UK’s future economic growth and global competitiveness. After all, the more effort is made to promote the City’s role as a wealth generator the more distributable value the sector is likely to generate.

This can only be welcome for a Labour government which will struggle to tackle its to-do list with public finances as they are. 

Even so, Labour ministers are unlikely to want to join any cheerleading squad, not least because the City still has work to do to shake off post-crisis tropes in the eyes of its members. But for a sector still smarting from its often-strained relationship with recent Conservative governments, the value of steady support from the next government cannot be understated – whatever form that takes. 

Finance bosses shouldn’t ignore Brexit noise 

A scheduled review of the UK’s current trade deal with the European Union is nearing and already attention within the business community is shifting to the task ahead. The British Chambers of Commerce, the UK’s largest business organisation, last week called on the next government to deepen EU ties to boost trade and growth. 

A Labour government will have to get creative in its approach to EU relations, not least because it will need to balance calls for a fundamental Brexit rethink with the competing preferences of its Brexit-voting supporters. It has already ruled out a return to the EU single market or a customs union with Brussels but promised to seek to improve ties in its manifesto. 

For City bosses that have by now navigated being almost entirely shut out of EU markets, and been largely ignored in previous negotiations, the temptation to ignore the noise will be great. They shouldn’t. A change of government will also force a political reset with EU decision-makers. And that also presents an opportunity for the City to push to revisit its relationship with the bloc – a prospect to be grasped, not ignored.

Real-world sums

Just one per cent of UK primary schoolteachers believe the majority of their pupils have an “adequate” level of financial literacy, according to a recent study from the Social Market Foundation. Labour said in October it would introduce “real world” maths in primary schools if elected. Although light on detail, such a plan is undoubtedly a sensible step forward. But its success rides on all of us taking responsibility to educate the next generation on everyday finance and why understanding it matters. 

Quote of the week

The lack of women in computing may lead to… the dominance of men in shaping the modern world. The number of girls in England studying for a computing GCSE has more than halved since 2015, according to research from King’s College London. 

What I’m reading

Things We Do Not Tell the People We Love by Huma Qureshi

Summer holidays provide a great excuse to re-read old favourites in my view. And this beautifully written collection of 10 short stories published in 2021 is just that to me. Written by the former journalist turned critically acclaimed author Huma Qureshi, the book brings the reader on a journey through bucolic English countryside, the bustling city of Lahore and the relative calm of southern France. Interlacing all stories are elements of shock, as well as unspoken truths and misunderstandings between loved ones, family members and otherwise close friends. It’s poignant and relatable and, perhaps most importantly for this time of year, easily digestible. You won’t want to put it down, but once you do you will find yourself revisiting it again and again.