Tomorrow George Osborne will deliver one of the most important Budget announcements in recent memory as he outlines plans to deal with the harsh financial realities facing our nation.
The chancellor has already taken steps to trim the structural deficit but there is more to do if we are to maintain our reputation for fiscal stability among international investors and avoid a sovereign debt crisis.
In such challenging circumstances, we must all pull together in the same direction. That is why it is important to remember – as I told the chancellor and Mervyn King last week at Mansion House – that finance is the lifeblood of Britain’s manufacturing and wider services industries. Without funding, products are not produced, there is no budget for innovation and services go unprovided.
A successful financial services sector helps to support and drive the wider economy forward. So when people talk about rebalancing the economy, the debate should centre on how financial services can help businesses across the UK grow rather than ‘cutting the City down to size’.
There can be no return to business as usual. Therefore it seems pragmatic that the Bank of England the lender of last resort should have a greater authority in macro-prudential and microprudential regulation.
But as the regulatory landscape changes – both domestically and internationally – policymakers must make sure each organisation involved is clear about its responsibilities.
So I trust the new Independent Commission, led by Sir John Vickers, will not simply focus on the possible separation of retail from wholesale banking. It was not the integrated banks which failed. It is important therefore any proposals are rigorously assessed and help ‘put capitalism back into the heart of capitalism’.
Past failings have understandably altered the way the City is perceived by the public and politicians, and indeed how we perceive ourselves. But the industry has historically overcome a range of financial crises that have threatened to undermine its reputation. And each time the City has emerged bruised, but intact.
Therefore I would like to repeat the chancellor’s hopeful statement at Mansion House last week – echoing the famous words of Sir Winston Churchill – that we have now reached the “end of the beginning”.
So let us put an end to banker bashing, pointless recriminations, and harmful uncertainty. It is time now to move forward together and help shape this new financial era.
Nick Anstee is Lord Mayor of the City of London