Can Tulip Siddiq get Labour’s City plans blooming?
In the five years to 2020, the role of Labour City minister may have seemed, at times, a fairly thankless task.
Courting London’s financiers did not get top billing under Jeremy Corbyn, and the 2019 manifesto is rather lacking in references to Solvency II reform and post-Brexit financial services equivalence.
But the party, industry and public, have shifted their focus. Fears of a banking crisis have taken hold and financial technicalities have drifted into the lexicon of the average voter. The Square Mile has suddenly become a key battle ground between two increasingly vocal and visible City Ministers.
Labour’s Tulip Siddiq, the MP for Hampstead and Kilburn since 2015, now shoulders the responsibility for Labour’s efforts, facing off against the well-liked and increasingly well-known Andrew Griffith.
Siddiq, a former New Labour acolyte and long-time politico, doesn’t have the business experience of her opposite number, who served a senior exec at Sky before making the move into politics.
But she speaks to City A.M. just after calling for a review into the rippling impact of rate hikes, and claims a small victory against her opposite man in response.
“[Griffith] just stopped me in the lobby and said, ‘I’m happy to meet with you if you want to have a sit down and go through all the questions in the letter’,” she tells City A.M.
The pair are now set for a tete-a-tete to thrash out a potential review into financial stability – broadly on her terms.
But the uncomfortable truth for Siddiq is that her opposite man is currently riding high. Griffith was central to the rescue efforts of the stricken UK arm of Silicon Valley Bank last week in a move that has been hailed by the country’s tech chiefs. Even Siddiq concedes it was a job well-done.
“I congratulated HSBC […] and obviously made the point of Treasury’s hard work over the weekend. It was done very quickly,” she says.
“I suppose the question I ask is how did we get here in the first place? He didn’t really like me asking that, but I think it’s a fair question.”
Siddiq says she’s looking to uncover the answers to that in her proposed deepdive into financial stability, but it is perhaps a question that will struggle to find purchase when the City is focused on immediate existential threats.
And as the incumbent, Griffith is proving a regular point of contact for a Square Mile in crisis. It’s a position he is looking to capitalise on.
The energetic City minister is understood to have been on a wooing warpath in the past week, dining with some of the key movers and shakers involved in the UK’s landmark capital markets reviews, meeting the country’s top fintech bosses at the Fintech Strategy Group and now speaking with bosses at a party session later this week.
His visibility however, also means he shoulders the responsibility for some of London’s recent blows.
The City has been plunged into a period of introspection by a slew of top firms ditching London for New York in recent weeks.
Despite launching myriad reviews into the structure of the UK’s capital markets, the Tories are now inextricably linked with failed efforts to win the listing of the symbolically and strategically important chipmaker Arm, as well as a flood of firms away from London. Labour is looking to make hay.
“We feel a bit like we’ve seen too many firms move overseas where they can easily access the investment they need to grow. And we seem to be saying this time and time again,” Siddiq says.
“I just feel that prioritising the London Stock Market and pension fund investment is one of the things that we would seriously consider if we were in the treasury.”
Under shadow chancellor Rachel Reeves, the party has unveiled plans for a small business funding review to allow pension cash to flow into start-ups.
But similar plans are underway across the floor. Successive Conservative prime ministers and chancellors have been exploring measures to allow pension cash to flow into listed and unlisted firms, and in his budget last week Hunt nodded to measures in the Autumn to boost the appeal of the London Stock Exchange.
Siddiq is clear that action is needed sooner, accusing Hunt of “kicking reform into the long grass again.” But the mood music is remarkably similar.
The much-touted post-Brexit refresh of financial rules is another area where the demand of Siddiq and her opposite man may often overlap. She is keen for more rapid reform on
Solvency II reform for instance, but says that changes to ringfencing rules – which force banks to separate retail from investment activity – should not be tinkered with in a time of crisis.
“I don’t feel that global investment banking should put our UK high street banks at risk. And I think derivatives trades going wrong shouldn’t threaten working people’s lives and my constituents’ savings,” she says.
Points of difference
It’s a key point of differentiation at what can often sound a similar pitch. Siddiq may see Griffith as her opposite man, but some might be forgiven for thinking the pair could often be singing from the same song sheet.
When they sit down soon to thrash out Siddiq’s proposed rate hike review, they may find themselves working rather well together.