Callum Anderson MP: the Labour case for financial services
Aspiration, opportunity and enterprise are values Labour should always proudly champion; when we do we win elections and the country thrives, says Callum Anderson MP
Before I had the privilege of becoming Buckingham and Bletchley’s Labour MP, my career was in finance. Much of it was in Canada, but it was also varied. In addition to spells working at the London Stock Exchange, Canada Corporation and an EU institution, I started my career at national charities taking on payday lenders and fighting for a more financially inclusive UK.
Contrary to what some might expect, my career in finance strengthened my Labour values. It gave me a front row seat to the critical role, and responsibility, that the UK’s financial sector has for families and businesses across our country.
Those of us in Westminster can sometimes speak about financial services as though they exist only behind the glass towers of the City or Canary Wharf. But the reality is very different. Financial and professional services employ around one in 13 workers across the UK, with the majority of those jobs located outside London. Edinburgh, Belfast, Leeds and Bournemouth are all developing their own financial specialisms and driving growth.
Alongside our cultural output and life sciences expertise, this is one of Britain’s great modern success stories. We shouldn’t be reluctant to celebrate this. Aspiration, opportunity and enterprise are values Labour should always proudly champion; when we have done so, our party has won elections and sustained power, and our country has thrived.
Without a financial system firing on all cylinders, we cannot help entrepreneurs build globally significant companies that create wealth and jobs, drive investment into the industries and infrastructure of the future, and make Britain less vulnerable to global instability. Nor can we help families secure their financial futures and give them the opportunity to own a stake in the economy they help to shape.
Contrary to what some might expect, my career in finance strengthened my Labour values
To me, the challenge for policymakers is straightforward: how do we make Britain’s financial system work harder for Britain?
That means not only rewiring the British state, as the Prime Minister has rightly argued, but renewing the places we call home. Financial services have an important role to play in that effort.
That’s why, last week, I led a debate in Parliament on the challenges and opportunities facing UK financial services.
Encouraging investment in UK assets
First, we can be much more deliberate and intentional about encouraging greater domestic investment in UK assets, including high-growth companies and infrastructure. Over the past 30 years, British pension funds and institutional investors have steadily reduced their holdings in UK companies. While there are many reasons for this trend, the consequences are stark: too many promising British firms struggle to access the patient capital they need to grow, scale and list here, with intellectual property, talent and tax revenues too often following them overseas.
At a time when our economic, energy, national and technological security are rightly at the forefront of our minds, we should do everything we can to anchor these companies here. More of the capital generated by British savers should be helping to build Britain’s future.
This government deserves real credit for recognising this challenge and taking meaningful steps to address it. The Pension Schemes Act passed last spring was an important intervention. But we should consider how to build on that progress, perhaps requiring default pension funds to adopt a UK weighted approach to listed equities if they want to enjoy certain tax reliefs.
The Financial Services and Markets Bill will also help realise the promise of the Financial Services Growth and Competitiveness Strategy launched last year, creating the conditions for a stronger ecosystem in which British capital supports British businesses, as the Chancellor has rightly prioritised.
But the UK also needs to lead the next wave of technological innovation. Artificial intelligence, digital assets and distributed ledger technology are already reshaping global finance. Britain has a genuine opportunity to be a world leader, but only if we provide the right regulatory certainty.
We can embrace innovation while remaining vigilant about the risks. It is our duty, particularly at this precarious moment, to ensure that technological progress empowers people rather than leaving them vulnerable. This applies to banking and insurance as much as any other aspect of our lives.
We must never lose sight of financial inclusion either. Across the towns and villages I represent, too many people still struggle to access affordable credit and the financial products they need. We should be just as ambitious about expanding financial opportunity as we are about growing the economy. That will mean being as rigorous in making sure industry works constructively with government and civil society in delivering the Financial Inclusion Strategy, in addition to the welcome progress the government has made on expanding banking hubs.
Finally, we must invest in skills. The future success of financial services depends on attracting talented people from every background and every part of the country. That means supporting apprenticeships, retraining programmes and new routes into the industry, while ensuring regional skills shortages are identified and addressed.
Britain has a world-leading financial sector. The task for this Labour government, and one the Chancellor is rightly helping to lead, is to harness its strengths so that it delivers investment, opportunity and prosperity not only for the sector itself, but for every postcode in Britain.
Callum Anderson is Member of Parliament for Buckingham and Bletchley