Financial services may be near the top of the new government’s agenda, but the industry must make sure that it too is heard – and soon
The new coalition government presents the UK – and the financial services sector in particular – with an historic and exciting opportunity.
The general election was unusual in all kinds of ways. I never expected to watch a campaign in which financial services loomed large, but the banking crisis of 2008 made that inevitable. The election has also resulted in the first hung parliament in 35 years and the first coalition government in 65 years.
I strongly applaud David Cameron’s vision and resolution in deciding to go for a full coalition with the Liberal Democrats, rather than some looser arrangement. I hope and believe that this will provide the stability this country so desperately needs.
While I hoped the Conservative party would win outright – and campaigned vigorously for that outcome – I think that Nick Clegg’s decision to return the Liberals to government for the first time since they split in the 1930s was the right one, for them and for the country.
The agreement reached by the two negotiating teams was not comprehensive, but it gives a good flavour of the likely character of this new administration and, as in the campaign that preceded the deal, financial services feature significantly. In recent months, Vince Cable successfully portrayed himself as the would-be scourge of banks and bankers, and there is no doubt that went down well with many voters.
What worries me is the way in which the rest of the financial services sector – which has, in fact, performed very well during the downturn – has sometimes been tarred with the same brush as the bad banks.
The coalition’s programme for government promises “robust action to tackle unacceptable bonuses in the financial services sector” and “proposals to give the Bank of England control of macro-prudential regulation and oversight of micro-prudential regulation”.
The devil may be in the detail, and the industry cannot afford to sit on its hands and adopt a ‘wait and see’ approach. Financial services account for about 10% of the economy and must be allowed – and actively encouraged – to innovate and invest.
As the Mayor of London, Boris Johnson, rightly observed in a characteristically robust speech only last week: “It is completely nuts for people to want, as a matter of public policy, to attack the financial sector.” We must act to ensure the financial services sector enjoys the full benefits of this generally pro-enterprise government.
Our voice must be heard, loudly and clearly. I am optimistic about the future of our new Liberal-Conservative government. I am optimistic, too, about the future of our sector.
As the growing commitment to professional values continues to bed down across the financial services sector, I believe we have a unique opportunity not only to prosper, but also to turn the UK into a beacon of integrity, professionalism and superlative service for clients. That is how we will ensure this country strengthens its hard-won status as a world leader – the world leader – in financial services. IT