Last week, I was fortunate enough to attend the annual Bankers’ Dinner at the Mansion House. I’m not a banker, although the ones I was seated next to were very good company. It was one of those rare occasions where one gets to see the establishment at play, up close and personal. And the pomp and ceremony of the dinner manages to be both surreal and strangely reassuring at the same time, or perhaps that was just the fine wine.
The highlight of the evening is the set piece speeches by the chancellor of the exchequer and the governor of the Bank of England. There was a certain frisson of tension in the air, and some expectation of fireworks, but each man heaped praise on the other and their obvious respect for one another, and their joint determination to see Britain through the current economic slowdown, was palpable.
Alastair Darling’s speech was thorough and compelling, and a timely reminder that while things are tough at the moment and many families are struggling to make ends meet, these are problems that all developed economies are facing and this Labour government is well placed to ensure that people get the help they need in the short-term, and that the economy returns to the stable, low-inflation, steadily-growing state that has been the norm since 1997. Britain is not in recession, and things now are a world away from the strife, turmoil and stagflation of the 1970s.
While he went out of his way to rebuild relations with the business community and to acknowledge the significance of the City’s contribution to both UK plc and the Treasury’s coffers, the chancellor made it clear that the government will stick with the radical new policies that are essential to Britain’s well-being and to creating a fairer society. Whether it be a renewed commitment to world class education and training for the next generation of the British employees, or the new Australian-style points system for skilled immigrants, or reforms of financial regulation or even a commitment to hold open competitions to fill vacancies for the top jobs at the Bank of England itself, the sense of reforming zeal and clear purpose was evident, though delivered in a typically understated manner.
What also came through was this government’s strong commitment to ensuring that wealth is not just created, but spread. These days, the City is more meritocratic than ever, partly on principle and partly driven by the fierce winds of international competition. And of course the reason why the rather bizarre and only tenuously democratic institutions of the City of London survive in the 21st Century is that they are very good at promoting London as the wealth-generation capital of the world – it’s not in anybody’s interests to try and fix what ain’t broke. Even Ken Livingstone decided that was one battle it would be counter-productive to fight.
But the City is a means to an end, and only really matters to the extent that it serves the rest of country, and it should certainly ‘do no harm’. The job of ensuring that the colossal wealth generated in one square mile of the country stands to benefit all sections of society, and that we invest properly in the life chances of future generations, rests with democratically elected governments with a progressive heart and mind. We are at the start of a process of debate about how the social contract in relation to the tax system should be renegotiated, and there are also some interesting ideas being mooted about how City regulation can ensure that the financial incentives of executives can be better aligned with the long-term interests of both their employers and the wider economy. These debates must be governed by progressive ideas.
George Osborne was also at the dinner, and while he was seated just a few feet away from the man he shadows, it was impossible to envisage him giving the Mansion House speech with the same calm authority and moral vision. Indeed, it was impossible to imagine him giving it all, and we can all take heart from that.
Nick Bent is a former special adviser to Tessa Jowell