Shadow chancellor Anneliese Dodds has today made overtures to the City of London, telling a virtual conference that Labour wants to work with the financial services sector and prevent it from “turning inwards…[and] eschewing responsibility”.
Dodds, speaking at a virtual conference for the TheCityUK advocacy group, said Labour understood the value the sector has to the UK economy and promised the party would provide “long term planning…[and] a stable operating environment” if elected.
She said: “We need a much longer-term approach to securing a strong future for our financial and related professional services. A lack of long-term thinking has led to a patchwork of different measures rather than a proper strategy, for one of this country’s most important sectors.”
Labour’s relationship with the Square Mile under Jeremy Corbyn and John McDonnell was very frosty, with the pair often talking about the need to hit the financial services sector with new taxes and regulations.
Dodds has tried to mend this relationship since being named shadow chancellor by Sir Keir Starmer, while also trying to project the party as economically competent.
Speaking at the conference today, she said the government needed to build stronger relationships with the private sector and to save the City of London from its worst instincts.
“Labour will always want to work with the sector to establish high standards and responsible finance – capital put to work so it builds the businesses of the future – businesses providing decent work, helping us transition away from carbon, and paying their fair share of tax,” she said.
“We know what happens when financial services firms lose sight of those outcomes…when the sector turns inwards and starts talking to itself, rather than the people it exists to serve.”
The shadow chancellor also hit out at the government for being unable to secure a long-term deal for the UK’s financial services sector post-Brexit.
It was revealed by City A.M. last week that the EU is not planning on allowing the UK’s financial services firms to retain current access to European markets from 1 January next year.
Brussels can extend the same level of access as now by granting the UK regulatory equivalence, however the EU will not grant this before the end of the Brexit transition period on 31 December.
Dodds said the government should have sorted out this issue long ago and that financial services should have been a part of negotiations in UK-EU trade talks.
The EU’s decision to not grant equivalence will be a serious blow for the City of London, which wanted a fresh EU-wide deal since the UK exports around £26bn of financial services to the EU annually.
Chancellor Rishi Sunak last week granted equivalence to EU and EEA financial services firms, ensuring they can continue to have access to UK markets.
He also signaled that the UK may be ready to align its financial services regulations with other trading centres in a pivot away from the EU.
“Of course, we will always want a constructive and engaged relationship with the European Union,” he said.
“But after four years I think it’s time for us to move forward as a country and do what’s right for the UK.”