Financial services need attention, not favours
In the first episode of the Great British Bake Off one of the presenters, Sue Perkins, asks a contestant what he does for a living. “I work in the City as a client service associate,” came the reply, to which Perkins responded “basically a banker” before making a joke about the global financial crisis.
Unfortunately, constant banker-bashing (even on a baking show) is one of the legacies of the 2008 crash. The City can deal with a bit of gentle ribbing, but when this attitude spills over into political rhetoric (or worse still, political decision making) we have a problem.
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Theresa May and her Brexit ministers have spoken about protecting the interests of British business as a whole, with almost nothing said in relation to the City as a unique and vital engine of job creation, tax revenues and growth.
Given May’s political positioning this may not come as a surprise.
Indeed, when she has spoken about the City it’s been to attack high pay and supposedly poor governance arrangements. It’s even less of a surprise to hear Marxist shadow chancellor John McDonnell insist that the government must not give any “special favours” to the City as part of its Brexit settlement.
While the City certainly shouldn’t expect to benefit from any form of protectionism, it’s unrealistic to suggest that financial services as a sector should be treated the same way as other industries.
A vast amount of deep and complex regulations govern the way financial services companies are allowed to operate, within the UK and internationally. Capital requirements, passporting regimes, surcharges, licences, levies, the senior managers’ regime and the sheer breadth and range of the sector demonstrate that what we call financial services (but what a Bake Off presenter might call “banking”) is indeed a special case and must be approached as such during Brexit negotiations.
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The Treasury, with its institutional memory (and eye on the revenues) understands this but, as our front page today makes clear, many in the City fear that elements of the newly created Whitehall departments are less open to this reality.
Financial services do not need special favours from government, but they do warrant special attention.