Friday 10 January 2020 6:30 am

Corbyn’s defeat won’t end the debate about capitalism

The city, the wider business community and, indeed, our entire market economy may have escaped the ravages of Corbynism, but that doesn’t mean questions about corporate conduct or the nature of modern capitalism will fall away.

Nor does it mean that business leaders and advocates of liberal, free-market economics should step back from addressing issues of concern.

And there are plenty of concerns. Jeremy Corbyn and John McDonnell may have latched on to dissatisfaction and frustration over issues such as inequality and globalisation in order to bring down a system they have despised for decades, but the concerns they weaponised so cynically remain deep-rooted, despite the electoral failure of a hard-left Labour party.

It remains the case that a dynamic market economy is by far the best system for rewarding work and risk, allocating capital, advancing innovation and determining winners and losers. Labour’s ideological error was to insist that the system’s vagaries, contradictions and flaws are proof of its irredeemable inadequacies.


This week we reported on the record tax revenues generated by the financial services sector but, as City pundit William Wright was correct to point out, the value goes far beyond this illuminating but ultimately rather crude calculation.

Finance is essential to the wider economy, from the smallest startup in the south west to the largest public-sector pension fund.

More focus on (and appreciation of) this reality would not go amiss. But the problem runs deep. Wright runs the New Financial think tank, which focuses on capital markets.

The fact that its latest report is called The Crisis of Capitalism is telling.

We can assume Wright is a fan of capitalism, but he says it’s “in danger of losing the social licence from which it derives its legitimacy”.

His report analyses public opinion (grim reading) and concludes that “understanding the causes of the loss of faith in capitalism is the first step towards reforming and preserving capitalism for the greater good.” Copies should be sent to CEOs, without delay.

Skiing downhill

Downing Street’s ban on ministers attending the Davos summit didn’t last long, with news emerging that chancellor Sajid Javid has been given a pass.


A rather petulant-sounding Number 10 source had previously said that the government had better things to do than hang out with billionaires.

There are many reasons to boycott the annual ski resort bash but the net wealth of attendees isn’t one of them.

The fact that it’s become a virtue-signalling, white-washing parade of hypocrites and sycophants is the reason I’d give.

Who can forget last year’s highlight of Christine Lagarde talking to Bono and Rwanda’s increasingly tyrannical President Kagame about the importance of good governance? 

Meanwhile, for MPs keen to still get a sense of the place, Davos will host this year’s Parliamentary Ski Week, where honourable and right honourable members can enjoy discounted access to the white stuff and a reception with the mayor of Davos. Bon voyage!

Splashing the cash

2019 was a relatively healthy year for UK M&A though many in the City still talk of buckets of cash waiting in the wings, ready to be splashed around as our political waters start to simmer down.

Early evidence of this came on Wednesday with the news that lobbying giant Cicero has been tempted into the Havas/AMO family.

The shape (and size) of this temptation will become clear when deal details are announced but for now at least we can note it brings two of the nicest City gents under the same roof: Cicero’s Iain Anderson and Maitland/AMO’s Neil Bennett. Corks will pop at the Havas HQ in King’s Cross today.

Monster raving spoonies

When faced with a set of complex international negotiations, while at the same time reimagining the structure of government, you will turn to the greatest minds and most transformative leaders for help.

So spoon-bending oddball Uri Geller can surely expect to hear from Number 10 after offering his services. Geller says he’s answered the call from the PM’s chief adviser Dom Cummings who advertised for unconventional but brilliant candidates to join him.

He says he’s “confident” he will be brought into Downing Street. We’ll see.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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