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New government, new attitude to the City

Stuart Fraser
After five days of painstaking negotiations involving politicians from right across the political spectrum, we finally have a new Government – a formal coalition between the Conservative Party and the Liberal Democrats.

We now know the composition of the new Cabinet and have a clearer idea of the legislative agenda the Government will be pursuing in the years to come. This is what we need: a degree of stability and an understanding of the direction of policy.

Hopefully we can now move on from the very public berating of bankers and anybody who earns a large salary and/or bonus. Although directed at the domestic audience, it was also heard across the globe and has undoubtedly hurt our ability to attract the world’s top talent. Let us now move on to improve our regulatory environment without recourse to megaphone politics. There needs to be a coming together of government and the financial services industry to hammer out a strategy which addresses the many outstanding issues without damaging prospects for growth and job creation.

I hope this new coalition government will reassure businesses based in the UK – or those considering moving to the UK – that this country remains very much open for business.

But can the union last? There are clear and deep differences of view on a number of subjects which means that reaching some form of consensus will be difficult. However I am encouraged by Vince Cable’s comment “Head, not heart”. This country faces huge problems in tackling the budget deficit. That is the priority and dealing with this has to come before longer term issues.

Although this may be a “new” government it contains many familiar faces and I know every one of them recognises the important role the City plays in the UK. Now they are part of the government, it is not in their interests deliberately to run down such a vital contributor to our economy.

Whether or not recent events have changed the way we do politics in this country remains to be seen. It is far too early to judge. However I do hope that this coalition will give us the time needed to formulate and implement a strategy which will put our economy back onto a sustainable path and meets the expectations of our creditors.

Stuart Fraser is chairman of the City of London’s policy and resources committee.