TODAY I will be speaking at the City of London’s Conservative Party Conference fringe event entitled “The Challenge for Financial Services – Helping the UK Economy Grow.”
Having already spoken at the Labour and Liberal Democrat Conferences, this is the third time I have attempted to address this issue in as many weeks.
The focus of the City’s fringe event neatly and deliberately encapsulates the inherent conundrum facing the UK financial services industry at the present time.
If our industry is to restore its reputation and win back the public’s trust then it must help the UK economy to grow and help people to understand the role it plays in wider society.
At the same time, our ability to realise this goal is being constrained; the public’s negative perception of firms and individuals working in financial services means that politicians simply cannot be seen to be conferring any kind of benefits or advantages on the industry at this time.
If we want to diversify the UK economy in order to tackle our fiscal deficit – the UK government’s oft-stated “top priority” – and to help us better withstand future economic downturns, it will require substantial amounts of capital, the provision of which will be largely down to the financial services industry.
Inadvertently limiting the size of the financial services industry through poor regulation will inevitably result in much lower growth and will also increase the possibility of a double dip recession.
Not only would we see a huge loss of income, leading to much higher taxes, but jobs would also be lost throughout the UK and would by no means be restricted to those working in financial services.
If the financial services industry is to play its full and proper role in helping secure our future prosperity, we need better regulation on a global basis. Unfortunately the last few weeks have offered little in the way of encouragement for potential overseas investors, many of whom are already nervous about current and future regulatory and legislative reforms in the UK and the wider European Union.
I fully understand that speeches given at Party Conferences are necessarily designed to appeal to a party political audience but our political leaders must remember that every time they speak, the international business community will be listening and judging.
Let us hope that when Parliament is back in session, we can move past this anti-City rhetoric and start to deal with these important issues in a rational way that will benefit the financial services industry and thus the whole of the UK. I know our industry wants to play its part in the recovery and demonstrate that Britain is indeed “open for business” – we now need to agree on a course of action to make this happen.
Stuart Fraser is the Policy Chairman at the City of London Corporation