Boris Johnson calls for better links between City and No.10


Boris Johnson has called for a partnership between the government and the UK financial services industry in a post-Brexit and post-Covid economy, amid signs of improving relations between the two sides.

Ties between the city and number 10 have been strained for years, first in the wake of the global crash and later by the Brexit saga, but the Covid-19 crisis has helped bring the two sides closer together.

On Monday, Downing Street said the government “will support the innovation and competitiveness of Britain’s financial services sector” as it adapts to life outside the single market.

Johnson, British Prime Minister, hosted a first virtual roundtable with more than a dozen CEOs of major financial institutions. The meeting was also attended by Rishi Sunak, Chancellor of the Exchequer, and Andrew Bailey, Governor of the Bank of England.

Guests included Ana Botin from Santander, Noel Quinn from HSBC, Anne Richards from Fidelity, Jes Staley from Barclays and Nigel Wilson from Legal & General.

The meeting was characterized by an industry participant as “much more collaborative” than past exchanges between government and the financial industry. It lasted 75 minutes, exceeded by a quarter of an hour. The prime minister arrived early, the participant said.

A person briefed on the meeting said: “One of the main themes was the need for growth equity, especially for over-leveraged SMEs, following the emergency loans of the Covid period. Policymakers have agreed to cooperate to tackle the problem.

The government has already become a shareholder in a toilet maker, broadband provider and a company that helps make reusable cups as part of the Treasury’s foray into the venture capital market through the one of its coronavirus support programs.

Meanwhile, one participant said: “The big macroeconomic theme was that, by market capitalization, US banks are now 3.5 times larger than UK and European banks, in part due to differences in regulation and government support. . This is not a good result.

Asked about the response from Johnson, Sunak and Bailey, the participant said he was clearly in “positive listening mode”, especially on the issue of lowering the surcharge on banks.

Sunak announced in its budget that the additional 8 percent bank profit surcharge would be reviewed later this year. He acknowledged that plans to raise the standard corporate tax rate to 25 percent from 2023 would make the taxation of UK banks “uncompetitive”.

Banks present at the meeting made much of the fact that they were part of the government’s “leveling” program, with jobs created in Birmingham and other regional cities, while the roles of the City of London are remained largely stable.

Downing Street said after the meeting, the first of its kind, that Johnson discussed the role financial services could play in driving the recovery, including supporting long-term innovation and green growth.

“Underlying the discussions was a common desire to help meet ambitious climate change targets as we go to net zero by 2050,” Number 10 said.

An observer said Sunak thanked financial services executives for supporting the economy during the Covid crisis.

“He said he passionately believes in the industry and sees it as a gem of the economy,” the Observer said. “He said he was determined to keep the UK competitive and dynamic in this area.”


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