Pursuing the status quo is no longer an option for financial services
Sitting out the political debate, as many of the City’s financial services firms could do before the UK government wrested back control from Brussels, has become a strategy with a shrunken shelf life.
That was the narrative from a recent breakfast discussion CT Group held with senior figures from across the industry, drawing on the firm’s public opinion research and a conversation with Rt Hon John Glen MP, the longest-serving City Minister in recent times.
The research points to a political environment that has fundamentally changed shape. British voters are no longer moved by broad messaging on jobs and growth; they want tangible improvements in everyday life, affordability chief among them. As support for Labour softens, the political map fragments with potentially stark consequences for Britain’s businesses. The single or dual political relationship, cultivated and relied upon to move a legislative agenda, no longer offers the security it once did. Businesses have to engage right across the political spectrum and this is now not just good practice but a basic necessity.
At the same time, interventionist ideas that once sat at the margins of the political discourse, from wealth taxes to nationalisation, are gathering momentum. The assumption that firms can stay quiet and preserve the status quo is proving harder to sustain. And while the public accepts that the current Labour Government has fallen short of its growth ambitions, that frustration has yet to convert into a trust that business can lead the economic conversation. Social licence has yet to be earned by the private sector.
John Glen, the MP for Salisbury and a member of the Treasury Select Committee as well as a close advisor to Kemi Badenoch, brought a Westminster perspective to the same problem. Drawing on four years as Economic Secretary to the Treasury, where he helped build the post-Brexit regulatory framework, he pointed to a persistent gap between what financial services firms need in order to grow and invest, and the priorities of those legislating. Closing that gap, he suggested, depends on businesses being willing to make the case for themselves rather than assuming it will be made for them.
The challenging conclusion for the sector is that political engagement is no longer something to outsource to others or to defer; it is becoming the base condition of operating.
