Labour in the City were delighted to host a virtual Q&A between the newly appointed Shadow City Minister Pat McFadden MP and more than 70 of our members.  Pat provided an insider view on how the Labour Party is changing under Keir Starmer’s leadership, the type of relationship he wants with the City and Labour’s role championing wealth creation, as well as answering questions on a range of topics.

For those who couldn’t make it in person here are some of the key takeaways from Labour in the City Secretary, Nicholas Smith:

New guy, same as the old guy?

Barely a month into Keir Starmer’s leadership there are tangible changes within the Labour Party.  No-one is in any doubt about how voters felt let down by Labour and the need to rebuild trust and credibility.  Recent comments by Bridget Philipson, Shadow Chief Secretary to the Treasury, on refraining from any un-costed spending commitments are a good example of the new approach.

As a former member of the Treasury Select Committee, Pat is on familiar territory.  He’s had a positive early reception from City institutions is keen to put wealth creation at the forefront of the discussion.  It’s important, he emphasised, for Labour to champion the role of finance and to support those who build businesses and create employment.

How should we rebuild after the pandemic?

The economic crisis caused by the COVID-19 pandemic has required an urgent, dramatic, response. To support businesses impacted by COVID-19, the Government has leant heavily on loans and liquidity injections. Pat pointed out that this isn’t always going to the right, or only, answer and Labour will push for all financial tools to be considered to help retain as much economic capacity as possible until public health restriction ease.

The pandemic also creates a new set of exam questions for the Labour Party – how do we support greater investment in the regions? How do we pay for the necessary public health interventions without cutting off economic growth? Should we be re-thinking they way key workers are rewarded

While it’s too early to answer these questions definitively, Pat welcomed input from Labour in the City on how Labour Party policy should start to take shape.  His door remains open to those who haven’t yet been in touch.

What has the City ever done for us?

It was good to hear a senior Labour frontbencher resoundingly reject the distinction between the financial economy and the ‘real’ economy – Pat emphasised that the fortunes of the two are intertwined. And the size of Britain’s financial services industry is a strength to the country, not a burden, he insisted.

The City is made up of range of people who don’t fit the stereotype of a wealthy financier with most simply looking to build careers and businesses to support them and their family.  These are the people Labour needs to win an election and we shouldn’t make them feel uncomfortable just because they work in the City.

This, Pat told members, will require the Party to relearn the lesson that people can earn money, have a left of centre view of the world and support the Labour party.  It is essential that Labour makes itself welcoming to all these types (and more) as it rebuilds trust with this part of the country.  This will be a question of attitude as much as policy.

A details man?

Pat offered a glimpse into the other issues in the Shadow Treasury team’s in-tray. A few highlights:

• Financial inclusion. The Government’s policy on financial advice for the past decade has been damaging to many.  Many no-longer receive advice and the saver protection rules have not been sufficient to prevent harm being done to many.   The Labour Party will be giving more thought to this issue and how to help individuals make the most of their pensions and savings.

• Nationalisation. While the nationalisation agenda was at the core of the last Labour manifesto, the new team is ruling nothing in, and nothing out. Labour is doing a fundamental examination of its policy platform to build a credible offer at the next election

• Supporting BAME communities. The BAME community has felt the brunt of the COVID-19 pandemic disproportionately. The CBILS business support programme isn’t working well – Labour is well aware that better policy design is needed to ensure support measures reach BAME business owners in the most effective manner.

• Financial Transactions Tax. Pat is well aware of the strength of views in the City about proposals for an FTT. To emphasise, all policies are on the table and it’s far too early to say what will be in the next Labour manifesto.

• Consumer borrowing. The economic impact of Corona virus will see greater focus on consumer credit as the world has changed very quickly.

• Decentralisation of the workspace. Behavioural change will drive this as much as any policy.  COVID-19 is accelerating trends towards homeworking or decentralised models and we need to work with the grain of this.

Labour in the City would like to extend our thanks again to Pat and all our members for their excellent contributions.

Nicholas Smith

Secretary

Labour in the City