The Liberal Democrats returned to Glasgow for their party conference this year, having moved the date so as not to clash with the Scottish independence referendum. Unlike the Labour Party conference, where there was a palpable mixture of exhaustion from the campaign and relief at the survival of the Union, the Lib Dems were in a more contemplative mode, with the benefit of several weeks’ hindsight and developments such as the convening of the Smith Commission, which will consider Scottish devolution.
The atmosphere of earnest soul-searching was not only to do with constitutional issues. The party’s share in national polls is at a nadir going into a General Election campaign, and its position as a party of Government is unfamiliar in recent history. For politicians and activists more familiar with campaigning either on local issues, or in opposition, defending their record in power (or indeed, taking credit for the economic recovery) will be unfamiliar terrain.
At TheCityUK’s fringe meeting at the conference, we were joined by agenda-setting policymakers: Secretary of State for Business, Innovation and Skills, the Rt. Hon. Dr Vince Cable MP, and Treasury Select Committee stalwart John Thurso MP. The Secretary of State reprised the post-crisis prudential regulatory reform that the Government has undertaken, but said that work still remained to be done in improving the conduct and culture of the financial services sector. James Bardrick, UK Country Officer of Citi, said that the sector (particularly in the boardroom) was acutely aware of these shortcomings and was determined to remedy them over the long term. John Thurso MP echoed these sentiments, highlighting the importance of a functioning link between risk and reward.
We also heard from Citi about their perspective as an inward investor in the UK, particularly how the European Single Market acts as a great incentive for basing operations in the UK, both in London and in satellite operations in Belfast and Scotland. Vicky Pryce of the CEBR reinforced this point, saying that any fragmentation of markets, whether within the UK, the EU, or internationally is economically damaging.
Looking to the future, panellists anticipated changes that will take place in the financial sector over the coming years. Here, ‘competition’ was the buzzword: between banks and between alternative sources of finance. TheCityUK’s Chief Executive Chris Cummings said that the UK had historically been too shallow in business finance but that a more diverse ecosystem of finance options was emerging. The Secretary of State highlighted his department’s efforts at growing SMEs, particularly through its role as the UK’s largest source of venture capital. In what was perhaps a preview of developing policy thinking, Dr Cable highlighted the dearth of risk capital in the UK, exacerbated by what he characterised as a tax system favourable to debt finance.
Two sensational newspaper splashes greeted delegates arriving at the Conservative Party Conference, and indeed talk of scandal and defection was hard to avoid at Birmingham’s watering holes. Arguably, there were two developments of greater importance happening alongside the conference, ones that will potentially have a greater bearing on the outcome of the General Election and the next five years of Parliament.
In the main conference hall of Manchester Central, Shadow Chancellor Ed Balls MP burnished his party’s commitment to fiscal probity, re-stating commitments to balanced budgets with tax rises and spending restraint. Labour leader Ed Miliband MP also pledged to grow the number of high-quality apprenticeships for young people, re-pledged to break up big UK banks and promised to transform the NHS.
It’s always interesting to get away from the UK debates engaging TheCityUK, and to go to another EU member-state for an alternative view. TradeWonk’s annual visit to Ireland was a welcome opportunity to do so and to be exposed to Irish viewpoints for much of August.
This week we were in Belfast, kindly hosted by Citi, for a seminar to discuss the role of financial and related professional services in Northern Ireland.
A TheCityUK delegation, led by Mark Garvin of JP Morgan, visited Rome for a day of meetings on 23 July to prepare for the establishment of an Anglo-Italian financial services dialogue during the Italian Presidency of the EU.
Earlier this year I was invited by the British Chamber of Commerce of Morocco to give a speech on ‘Developments in Islamic Finance in the UK’ at a conference on “Islamic Finance in Morocco”. The conference happily coincided with the visit last week of the Rt Hon Lord Mayor of the City of London, Alderman Fiona Woolf, so I was able to join her delegation for a very full and productive programme in Casablanca and Rabat. As well as a 20 strong business delegation, the Lord Mayor was supported by the Prime Minister’s Trade Envoy to Morocco, Lord Sharman.
Given that today sees the most important European Elections ever, there could be not better time to talk about the UK’s place in the EU. Let me encourage you all to vote – as your conscience determines – but do make time.
As the leading cross-sectoral body for our industry, TheCityUK has been setting out the view of our sector on the EU-UK relationship. It is our role at TheCityUK to make sure that the practitioner voice on the EU debate is heard loudly and clearly, in the UK, the EU and in the international arena.
We are at a moment of transition between the old and new European Parliamentary and Commission mandates. The current mandate has focused on reform and stability following the financial crisis but in the next 5 years, the task will be to create an ‘agenda for competitiveness’ that enables the EU to deliver the jobs and growth we need. It is important that financial and related professional services engage in a dialogue with policymakers about our industry’s role in delivering solutions to the challenges facing Europe that directly meet that competitiveness challenge.
Last night I shared a platform with the Foreign Secretary at the FCO Leadership Conference reception. In my speech I set out why what the FCO does is so valuable and why it makes a difference to the UK’s business interests.