Just imagine it. Houses in Chelsea and Hampstead would become affordable to mere mortals – anyone for Cheyne Walk? The Flaming Ferraris, the £45,000 dinner bills, the red braces, basement swimming pools, inequality and even sexism itself would be banished. Bonuses would no longer make you green with envy, because they would just be a faded, painful memory, like over-the-counter derivatives.
The housing crisis – permanently solved as Canary Wharf and the Gherkin are all turned into surprisingly affordable flats. Second-hand Aston Martins picked up for a song by key workers as City traders pawn them off, and tables available once more at Chez Nicos. The bankers got their just deserts, with a whole industry of spivs given the Nick Leeson lesson. A mass exodus to Frankfurt, New York or Singapore? Bring it on. Bliss would it be in that dawn to be alive. But to be young, very heaven!
It is true that as a young trendy lefty economics correspondent of the Observer covering London and Frankfurt vying for the crown in the 1990s, I used to enjoy shocking people by saying that I wished Frankfurt would win so I could afford to buy a house.
It was a joke, of course, but it was surprising how many people nodded vigorously in agreement. And they still would. There is no doubt that many people don’t really want London to continue to be the financial capital of the world. It is a strain of thought that underlies much debate about financial services, but is so shy it only usually comes out in polite society as a question. If you warn in a broadcast interview that London’s position as a financial services capital is threatened, then quick as a flash you are asked: “What’s the problem with that?”
Only militant unions and their more green-eyed fellow travellers openly say we don’t want the bankers here. But many mainstream politicians are pretty sympathetic to the idea that we need fewer bankers. Just listen to their rhetoric – when they indulge in banker bashing, do they balance it by saying that of course we mustn’t overreact and it is in our interests that London must retain its position as a financial capital? Only a few notable exceptions – such as the Chancellor – do.
I trust – gentle reader of City A.M. – that I don’t need to rehearse with you the reasons why we should want London to remain the world’s financial capital (except to mention the £60bn paid in tax, and the 1m UK jobs).
But persuading the rest of the country that we should want this is fundamental to reaching a new settlement over financial services. If people secretly want bankers to leave, then they are never going to worry about bashing them too hard while they are still here. If they ain’t leaving, the medicine ain’t working, is the thinking.
It is essential that the public, commentariat, and political class support the principle of London remaining a global financial capital. And that means bankers must worry about public opinion. Before the crisis it didn’t really matter if they followed the Millwall strategy – “no one likes us, but we don’t care”. Bankers may not worry about what the public think, but the politicians who dictate tax and regulation do. Financial services companies shouldn’t stick their heads in the sand, but should embrace the British public.
Once we decide as a country that our clear, unequivocal long term goal is that we want London to remain as a financial services capital, then all else follows. Taxation and regulation won’t be the products of short-term domestic political tactics, but of a long term strategy of ensuring that London has a competitive and predictable regime that will encourage global financial services companies to invest here. Out goes unilateral punitive action, replaced by an internationally co-ordinated response.
The global banking chiefs based in New York or Shanghai, recoiling in horror at the banker bashing in London that is unparalleled in any other financial centre, ask us this simple question when they are making their investment decisions: “Does London actually want to retain its position?”
So go on: say you want London to remain a global financial capital. You know that you do. Now we just need to persuade the doubters that they should too.
• Anthony Browne is policy director for the Mayor of London, Boris Johnson. His regular weekly City A.M. column starts on Thursday.