Labor says it will no longer “make fun of business” and unveils 10 city councillors

Labor says it will no longer “make fun of business” and unveils 10 city councillors

The Labor shadow minister revealed 10 advisers from the Square Mile, insisting her party long ago stopped “mocking business”.

Tulip Siddique said Labor wanted to work with the banking sector and promised to prioritize stability after the Brexit and Covid turmoil. “We are not coming in and tearing up all the legislation,” she said.

A friend told the Financial Times that Labor had worked hard over the past two years to erase memories of Jeremy Corbyn’s left-wing leadership of the party and embrace the City.

“People were concerned that under the last leadership we were making a mockery of business. There was a perception that was still there.” She said that under Sir Keir Starmer the relationship had changed.

On Friday, Starmer and Rachel Reeves, the shadow chancellor, will launch a review of financial services in Edinburgh, where they will unveil a committee of city leaders who will advise the party on its new policy in the sector.

Friend said the names of the advisers had been kept secret until now to avoid the risk of the Conservatives pressuring them to withdraw – as happened when business leaders signed up to Labour’s new infrastructure advisory board.

“The Conservatives have no idea. We kept it quiet for that reason,” she said in an interview at Barclays’ headquarters in Canary Wharf, where she was speaking with Matt Hammerstein, the bank’s UK chief executive.

Advisers include Sir Douglas Flint, Chairman of the Aberdeen Company; Sir Ron Khalifa, Independent Director, Bank of England; Baroness Shriti Vadera, Chairman, Prudential; Sir John Kingman, Chairman of the Legal and General Group, and Anne Glover, Co-Founder of Amadeus Capital Partners.

Also on the panel are Susan Allen, chief executive of Yorkshire Building Society; Mrs. Elizabeth Corley, Chairman of Schroders; Nigel Higgins, Chairman of Barclays Group; Charles Randle, former Chairman of the Financial Conduct Authority; and David Schwimmer, CEO of the London Stock Exchange Group.

Friend said Labor would publish the party’s final report in early 2024, with its findings included in Labour’s manifesto. She added that the consultants were working independently.

“In general, we want to create stability,” she said. “There’s no doubt that if a Labor chancellor comes in, there will be disagreements. But we don’t want to tear up the regulations that we helped to draft and vote on.”

She stressed that Labour’s previous aversion to financial services was a thing of the past. Former leader Ed Miliband once distinguished between “predators and producers”.

“Rachel and I are clear: If we don’t engage with the private sector now, we won’t be able to grow the economy,” she said. “It’s not so much about Ed, it’s about the Jeremy (Corbyn) era.” I want to be clear: he’s gone.

Although Siddiq said stability was her priority, she added that Labor also wanted to solve problems including improving Britain’s Brexit deal with the EU, tackling financial exclusion and using financial services to reduce regional inequality.

She said the party had no plans to raise taxes from the financial services sector other than a move to end the private equity tax loophole, but added she could not definitively rule out such a move in the future if “something dramatic happens.”

“I would just say never say never, but… this was never an area we discussed,” she said.

The shadow secretary said a crucial priority was to improve the terms of Boris Johnson’s “failed Brexit deal”, including negotiating a system for the mutual recognition of professional qualifications to boost mobility.

She said she also wanted “better trading arrangements if we can get there”, but offered few details, and Brussels was wary of striking special deals with Britain.

Friend added that she and Reeves were “concerned” about financial services companies moving their headquarters from the UK to the EU. “We need to come up with more policies on this front.”

Starmer and Reeves are expected to use their visit to Edinburgh to discuss how the Scottish financial services sector has helped boost the UK economy outside of London and how it can do the same in England and Wales, particularly through the development of financial technology.

The party has backed several recent city reforms introduced by the Conservative government, including plans to encourage more investment by pension funds in the wider economy and a new target for regulators to boost the city’s competitiveness.

But Siddiq said the government was moving too slowly on reforms to the so-called Solvency II rules covering the insurance sector which aim to unlock £100bn of investment in infrastructure and other long-term projects.

She added that she was “concerned” about some of the government’s “Edinburgh reforms”, put in place by Finance Minister Jeremy Hunt last year to create a more flexible regulatory framework for the city after Brexit, and that she would reconsider some of them.

“We would like to maintain the buffer fence if possible,” she said, referring to the proposed relaxation of post-2008 break-up rules that separated retail and investment banking.

“I’m surprised they’re taking such a light-hearted regulatory approach,” she said. “I think it seems a bit reckless.”

Friend also said she was “deeply concerned” about plans to reform the “senior managers regime”, which was introduced in response to the collapse and holds senior bankers personally liable for wrongdoing that occurred under their supervision. “If it really reduces bureaucracy, that’s a different thing.”

“No one believes Labor will do anything other than impose more taxes on the financial sector and make the industry uncompetitive,” said Bim Afolami, the city’s minister.

Additional reporting by Ian Smith

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