Labour’s shadow City minister has unveiled 10 grandees from the Square Mile to advise the party, insisting her party has long stopped “sneering at business”.
Tulip Siddiq said Labour wanted to work with the banking sector and she promised to prioritise stability after the upheavals of Brexit and Covid. “We are not coming in and ripping up all the legislation,” she said.
Siddiq told the Financial Times that Labour had worked hard over the past two years to eradicate memories of Jeremy Corbyn’s leftwing leadership of the party and to embrace the City.
“People were worried that under the last leadership we had been sneering at business. There was a perception that was still lingering.” She said that under Sir Keir Starmer’s leadership the relationship had been transformed.
On Friday Starmer and Rachel Reeves, shadow chancellor, will launch a review of financial services in Edinburgh, where they will unveil the panel of City leaders who will advise the party on its new policy for the sector.
Siddiq said the names of the advisers had been kept secret until now to avoid the risk that the Conservatives would put pressure on them to pull out — as happened when business leaders signed up to Labour’s new advisory council on infrastructure.
“The Tories have no idea. We kept it quiet for that reason,” she said in an interview at Barclays’ headquarters in Canary Wharf, where she had been talking to Matt Hammerstein, the bank’s UK chief executive.
The list of advisers includes Sir Douglas Flint, chair of Abrdn, Sir Ron Kalifa, independent director at the Bank of England, Baroness Shriti Vadera, chair of Prudential, Sir John Kingman, chair of Legal & General Group, and Anne Glover, co-founder of Amadeus Capital Partners.
Also on the panel are Susan Allen, chief executive of Yorkshire Building Society, Dame Elizabeth Corley, chair of Schroders, Nigel Higgins, group chair of Barclays, Charles Randell, former chair of the Financial Conduct Authority, and David Schwimmer, chief executive of London Stock Exchange.
Siddiq said Labour would publish the panel’s final report in early 2024, with its findings feeding into the party’s manifesto. The advisers were working in an independent capacity, she added.
“Overall we want to create stability,” she said. “There’s no doubt if a Labour chancellor comes in, there will be differences. But we don’t want to rip up regulation that we have helped to shape and voted through.”
She emphasised that Labour’s previous aversion to financial services was in the past. Former leader Ed Miliband once drew a distinction between “predators and producers”.
“Rachel and I are clear — if we don’t engage with the private sector now, we’re not going to grow the economy,” she said. “It’s not so much about Ed — it’s the Jeremy [Corbyn] era. I want to be clear: it’s gone.”
Although Siddiq said stability was her priority, she added that Labour would also want to fix problems including improving the UK’s Brexit deal with the EU, tackling financial exclusion and using financial services to cut regional inequality.
She said the party had no plans to raise more taxes from the financial services sector beyond a move to end a private equity tax loophole, but added she could not conclusively rule out such a move in future if “something dramatic happens”.
“I would just say never say never, but . . . that’s never been an area we have discussed,” she said.
The shadow minister said a key priority was to improve the terms of Boris Johnson’s “botched Brexit deal”, including negotiating a regime for the mutual recognition of professional qualifications to boost mobility.
She said she also wanted “better trading arrangements if we can get there”, but gave few details and Brussels has been wary of striking special deals with Britain.
Siddiq added that she and Reeves were “worried” about financial services companies moving their headquarters from the UK to the EU. “We need to come up with more policies on this front,” she said.
Starmer and Reeves are expected to use their visit to Edinburgh to discuss how the Scottish financial services sector has helped to boost the UK economy outside London and how it could do the same in England and Wales, particularly through the development of fintech.
The party has endorsed many recent City reforms introduced by the Conservative government, including plans to encourage more investments by pension funds into the wider economy and a new objective for regulators to promote the City’s competitiveness.
But Siddiq said the government was moving too slowly on reforms to so-called Solvency II rules covering the insurance sector that are intended to release £100bn for investment in infrastructure and other long-term projects.
She added she was “worried” about some of the government’s “Edinburgh reforms”, set out last year by chancellor Jeremy Hunt to create a looser post-Brexit regulatory framework for the City, and would revisit some of them.
“We would like to maintain ringfencing if possible,” she said, referring to a proposed loosening of the post-2008 crash rules that separated retail and investment banking.
“I’m surprised they are taking such a light-touch regulatory approach,” she said. “I think it looks a bit reckless.”
Siddiq also said she was “quite worried” about plans to overhaul the “senior managers regime”, which was introduced in response to the crash and held senior bankers personally responsible for infractions on their watch. “If it genuinely cuts down on bureaucracy, that’s a different thing,” she said.
Additional reporting by Ian Smith