If the City didn’t exist, we’d need to invent it
WHAT have financial services ever done for me? It is a question that the Occupy the London Stock Exchange protesters could well ask themselves, as they bring the church (rather than capitalism) to its knees. The public debate about financial services has focused on bonuses and risks, but there has been virtually no discussion of how much we all, each and every one of us, use and rely on the sector.
I presume the protesters and their fellow-travelling clerics aren’t opposed to the £50bn or more that financial services pay in tax each year, or the million or so jobs created. Do they really not like the bond markets, which last year lent the government £128bn to finance its spending on health, education and welfare (and without which the cuts would be so much worse)?
The campers want to occupy the London Stock Exchange, but what don’t they like about the 430 British companies raising nearly £20bn on it for investment, as they did last year? It is said that banks are sucking the life out of small businesses, but in reality they lent small and medium-sized enterprises about half a billion pounds every month in the first half of this year, according to figures collated by theCityUK.
Are the protesters really opposed to an industry that enables 11.4m families to buy their own home, by lending them a total of £1,200bn worth of mortgages? Or that allows 19.6m households to protect ourselves with buildings and contents insurance, which we claim to the tune of about £10m every day? Or do they want to stop nine out of 10 British adults owning a credit or debit card, and using them to pay for £428bn worth of shopping with 8.4m credit and debit card payments?
What don’t they like about the financial services industry paying nearly half a billion in salary cheques into our bank accounts last year? Or do they want to stop the 5.1m pensioner households receiving £30bn last year from their private pensions, helping avert poverty in their old age? Are they opposed to the industry looking after £3,200bn in savings that British individuals have put aside?
We hear so much about the wrong that the industry does, but very little about the right. But we are all its beneficiaries. It doesn’t just keep the economy going, it keeps every household in Britain going. Often, it does it for free, not charging for services such as current account banking or using any of the 63,000 ATM machines (what other industry does so much for free?). It pushes out the boundaries of technology to be ever more convenient – more than half of British adults now use internet or phone banking to pay bills. Contactless payments and PIN codes continue to make shopping much easier (remember writing cheques at the check-outs?).
Just imagine life without financial services – businesses and government unable to borrow for investments and spending; all of us having to get paid in cash and stick it under a bed; waiting forever to save up the purchase price of a house; saving gold bars to pay for our old age; carrying around cases of cash whenever we want to buy expensive items. Life would grind to a halt. That might sound like heaven for the protesters, but I am sure for the rest of us it sounds like hell.
Anthony Browne is a board member of theCityUK.
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