But is it too late for Labour?
If ever you wanted proof that the world is governed through political cycles rather than economic ones, now is the time to observe it. Ten years ago Gordon Brown’s message to the City was of “light-touch regulation”. Now he has the financial sector by the short and curlies, and you wonder how far it will go before he is given the boot.
The New Labour project has presided over a decade of immense expenditure, wealth generation but also phenomenal debt management. Even with the economy in crisis, Brown became an international leader to step up to facilitate the fix. But Brown’s economic record has enabled business to flourish. And there is no question that the nation has prospered and things have really got better.
But leadership qualities aside, the key criticism being levelled at the prime minister now is that of control. Why didn’t he see the storm coming, let alone heed a warning? Take, for example, the massive levels of personal debt, the inflated housing market or gaps in international supervisory control and capital management. Where were the preventive measures? The oversight? Perhaps it was asking too much.
But such issues are now to become an election battleground and, depending on who wins, the implications will be profound for you and your clients.
So it’s important to understand the multi-faceted debate. From public spending cuts to flood management and liability reforms, there are a number of issues that insurance needs to assess (see pages 12-15). Top of the list is the threat of global regulation, but consider that insurers and global brokers are queuing to ditch the UK for foreign tax havens, and this issue alone becomes a hot potato. Lloyd’s chairman Lord Levene is the latest to shine a warning light on the government, and Willis the latest company to snub London in its planned move from Bermuda to Ireland. But is it too late for Labour? Shadow Treasury financial secretary Mark Hoban offers an alternative way on page 16, and you’ll hear Vince Cable, the Lib Dems’ shadow chancellor, on 15 October at the Insurance Times leaders forum.
What is becoming clear is that there needs to be an in-depth, considered debate around the detail of financial reform, as well as the future of London as a financial hub, before any party can implement the change required. In the meantime, we’re going to have to wait until the necessities of a general election campaign dictate such public dialogue and critique before hearing any meaningful detail concerning economic reform. And it’s that uncertainty that everyone can do without. IT
See news analysis: Have things got better yet?