John Glen: We want high standards for financial services. That’s not the same as derailing our competitiveness agenda.

9 Feb

John Glen is Economic Secretary to the Treasury and City Minister, and is MP for Salisbury.

When I was appointed Economic Secretary and City Minister in January 2018, the world looked very different to now. Back then, the fundamental trajectory of post-Brexit Britain was still contested across the country, and across the Conservative Party.

However, I have always been crystal clear in my conversations with Treasury officials that we had to deliver a Brexit for financial services that enabled us to remain global leaders in this industry. It therefore came as somewhat of a surprise to see Daniel Hannan argue on these pages last week, that he had been most disappointed by a failure to distance ourselves from the EU in financial services.

It’s important, right at the outset, to highlight that despite the numerous forecasts of woe – massive job losses, capital flight, loss of competitiveness – our financial services sector remains in robust health. Just last week, the City of London Corporation produced research showing that London was clear of the international field for its attractiveness to the financial services industry.

London scored 61 in analysis of 95 different metrics, ahead of New York (58) and Singapore (53), and far clear of other European centres which had been much talked about as future rivals. Frankfurt trailed in fourth place with a score of 45, while Paris was even lower down at 41.

Last July the Chancellor outlined his vision for an open, technology embracing, green, and globally competitive industry. Having previously worked in financial services, he understands the importance of creating an agile and dynamic sector that works in tandem with a world-leading regulatory framework.

We are not interested in a race to the bottom, where we seek to attract the world’s best companies and nurture start-ups on the basis of creating a Wild West for financial services judging success by how many regulations we have disposed of. The key to the future success of the industry is competitiveness. High standards and robust but reliable regulators enhance that and should not be framed as derailing our competitiveness agenda.

The Government’s response last year to Sir Iain Duncan Smith’s Taskforce on Innovation, Growth and Regulatory Reform (TIGRR) showed very clearly how we plan to maximise the benefits of leaving the European Union. We are repealing all retained EU law and giving the domestic UK regulators, the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA), powers to regulate the financial services sector.

Following the Future Regulatory Framework the regulators’ action will be underpinned by a growth and competitiveness objective and clear accountability to our elected representatives at Westminster. This is not an EU-lite approach at all. We are pursuing the most fundamental reset and changes in our financial services architecture for many generations, and the Treasury is working at pace to develop the legislation needed to deliver these changes.

We have also had the Ron Kalifa Review of UK Fintech and Lord Hill’s UK Listings Review. This has led to prompt changes in listing rules and the setting up of a Centre for Finance, Innovation and Technology to drive further growth in FinTech across the UK. By avoiding complacency but responding to the findings of independent reviews Government is delivering a radical reform agenda and executing fundamental changes.

Many of the legacies of EU directives are embedded in cost structures and corporate thinking. Our job is to enable the swift rightsizing of such rules in a way that industry finds helpful (e.g. reforming the UK prospectus regime to make access to our deep capital markets easier; creating a new Long-Term Asset Fund structure to allow investors access to better returns or removing the Share Trading Obligation and Double Volume Cap to promote greater choice and better outcome for investors). We aim to do this in ways that minimise disruption and new costs as global growth opportunities abound.

It is a very exciting time to be the minister responsible for financial services. There is enormous opportunity across the UK, not just in London, especially with our innovative, world-leading fintech industry. Increased regulatory agility post-Brexit will also help us to better enable new prospects in cryptocurrency and blockchain. We have an ongoing leadership role to play in the Green Finance arena, and in wholesale markets we continue to move swiftly to maintain the UK’s status as a global financial centre and deliver for large and small UK companies, as well as international businesses who want to raise money and manage risk.

Domestically we intend to legislate imminently to secure access to cash for citizens up and down the country and introduce reforms to Credit Unions so more products can be offered – again building on a deep dialogue with that sector over recent years. I welcome the progress on the No-Interest Loans Scheme which will test whether No-Interest loans can sustainably provide a vital option for those excluded from credit.

We are most certainly living in an unprecedented moment of innovation in the industry, and the space and autonomy that Brexit has created will serve us well to continue capitalising on our unique financial services ecosystem and drive us forward in the years ahead.

Judith Barnes: Another fine standards mess – at the City of London Corporation

6 Dec

Judith Barnes was a co-opted member of the City of London Corporation’s Standards Committee until the Corporation abolished the Standards Committee earlier this year.

The government is not the only culprit when it comes to undermining standards in public life. The City of London Corporation paved the way, though without, unfortunately, the U-turn forced on the government by resistance in Parliament and the press. The sorry saga of the Corporation’s tussle over standards, detailed in a damning account by Lord Lisvane in his review of governance at the Corporation, may provide some useful pointers for Parliament in the fallout from the Owen Paterson affair.

The trouble started back in 2016 when, for the first time, a complaint about the conduct of a Member reached a hearing before the Corporation’s Standards Committee. The Committee ruled that he had breached the Corporation’s Code of Conduct. This caused consternation among the body of Members, who were particularly exercised by the iniquity of the Standards Committee in naming the Member in question in its annual report. It prompted a review by a QC who recommended a right of appeal (sound familiar?) to a committee of Members independent of the Standards Committee.

This did little to reconcile Members to the standards regime. When the same Member was found to have breached the Code of Conduct again, the new appeals committee dismissed his appeal. Members still refused to implement the proposed sanction (to suspend him from the new appeals committee, ironically).

By then, a head of steam was building to abolish the Standards Committee and outsource rulings on the conduct of Members. The Corporation turned to Lord Lisvane for a solution. Having concluded that Members were incapable of policing themselves, he recommended that the Corporation set up an independent panel to adjudicate on complaints about Members’ conduct. For legal reasons, determinations by the panel would need to be endorsed by the Corporation so, crucially, he said that any determination by the independent panel on a breach of the Code of Conduct, and recommended sanction, would need to be decided by Members without debate.

Predictably, Members, who had made great play of not wanting to be judged by their peers, then insisted on having some Members on the ‘independent’ panel when it considered appeals (to provide ‘internal context’ apparently). They threw out the need for a decision without debate which was Lord Lisvane’s attempt to put a stop to the Corporation’s repeated resistance to determinations on Members’ conduct. The upshot is that Members, who could not overturn determinations when they came from the Standards/Appeals Committees (only sanctions), are now at liberty to override any determination by the independent panel.

Events at the Corporation suggest improving the system can only do so much. Once there are appropriate safeguards in place, such as a right of appeal, an independent element, and the right procedures, elected members – at national or local level – need to recognise that verdicts delivered in accordance with the system will in the normal course merit support.

The rules governing conduct have to be right of course. The Committee on Standards in Public Life has recently decided to introduce a requirement for holders of public office to treat others with respect. Although at first glance this would appear uncontroversial, experience at the Corporation suggests it has its dangers. Along with the campaign to abolish the Standards Committee, there was a push to give Members a blanket dispensation for their term of office to speak and vote on local ward matters in which they had a financial interest, unless the matter in question affected the Member ‘uniquely or more than any of their constituents’.

One of the Members who applied for this dispensation owned his flat with his wife. In my capacity as a co-opted member of the Standards Committee, I pointed out by way of hypothetical example that, if he and his wife stood to profit from a planning application that benefitted no-one else in his ward, he would be able to vote for it.

He promptly complained that I was in breach of the Code of Conduct on the basis that I had shown a ‘lack of respect’, by slurring him and his wife as ‘hypothetical criminals’, and was ‘wrong’ (who knew being ‘wrong’ amounted to misconduct?). The second limb of this complaint was blown out of the water by a leading QC’s opinion which made it clear in no uncertain terms that such a dispensation would be unlawful. Nothing daunted, the Corporation, by some mental contortion that they have yet to explain, nevertheless concluded that my use of a hypothetical example to explain my objection to granting this unlawful dispensation could indeed constitute a ‘lack of respect’ and even ‘bring my office or authority into disrepute’.

The concept of ‘respect’ is all too open to abuse in this way. In the current climate it risks importing ‘cancel culture’ into political debate. That would undermine not only standards, but democracy itself.

Jenrick warns City of London Corporation to ensure “heritage and tradition are given robust protection”

12 Feb

The City of London Corporation is very much an anomaly in terms of local authorities. In 1965, changes brought about in Greater London saw the creation of 32 boroughs. This was a dreary reform that saw administrative logic sweep aside tradition and local identity. But just as Asterix and Obelix defended “one small village of indomitable Gauls” against the Romans, there was a small exception which resisted the bureaucratic conformity that was fashionable at the time. Such was the importance of the City of London’s status in our island story that an exemption was allowed for the square mile. It was too well-entrenched. All the legal protections granted by Royal Charter.  The pledge in the Magna Carta that “the city of London shall have/enjoy its ancient liberties.”

Thus to the fury of the killjoy Lefties, all the pomp has survived. The banquets and the Lord Mayor’s Show. The sheriffs, the aldermen, the livery companies, the town clerk, the chamberlain, the beadles. The police with their special helmets. The special voting arrangements for its small electorate.

How extraordinary then, that of all local authorities, this bastion should have captured by the forces of wokeness. Last month the BBC reported:

“Statues of two politicians with links to the transatlantic slave trade are to be removed from central London.

The City of London Corporation announced it would remove statues of William Beckford and Sir John Cass from the Guildhall, in Moorgate.

The decision was made by a taskforce set up by the corporation following nationwide Black Lives Matter protests.

A spokeswoman called the move “an important milestone” in moving towards an “inclusive and diverse City”.

The corporation, which looks after the Square Mile in the capital, said it was considering the future of a number of statues and road names with links to the slave trade.”

Robert Jenrick, the Communities Secretary, has written to the Lord Mayor, William Russell, and senior officials calling on them to reconsider. His letter says:

“Our stance on historic statues and sites which have become contested is to retain and explain them; to provide thoughtful, long lasting and powerful reinterpretation that responds to their contested history and tells the full story.”

“These principles similarly apply not just to statues, but other aspects of our heritage, including street names.

“As a unique local authority with unique status compared to others, I hope you will consider this national advice carefully, given you are seen as a leading authority.

“The Corporation of London is itself a product of the City’s rich history. It is in the City’s own interests that heritage and tradition are given robust protection.”

Freedom is not something to be taken for granted. Slavery has dominated in most places across the globe throughout most of history. The unique aspect of the British Empire was abolishing it, in 1833 – with the Royal Navy subsequently stamping out the slave trade by stopping slave ships, not just at British ports but elsewhere. That is a source of pride. But should we really discount the achievements of any monarchs, businessmen, or other public figures, from before that time? Those on “taskforces” set on denigrating our past would seem to think so.

Historic England has produced a checklist for local authorities concerning “contested heritage.” It defines that as “historic objects, structures, buildings or places where the associated stories or meanings have become challenged. The interest in interpretation of our past has never been greater, and when heritage becomes contested, strongly-held views tend to exist on all sides.” It opposes knocking down statues and instead suggests “educational programmes” to provide a balanced account. There would still be plenty of room for dispute about what points should, or should not, be included in any adjoining display cases. But that approach seems reasonable. It is in the spirit of Kwasi Kwarteng’s recent comments that rather then de-colonise the curriculum” the opposite is needed “to learn more about colonialism.”

We might expect an agitprop response to this issue from Lambeth Council – evidently keen to restore its “loony Left” reputation. Yet how extraordinary that the City should need to be protected from a wave of cultural vandalism instigated by the City of London Corporation.

This desperate situation led my colleague Invictus to consider if the Government should respond “by abolishing the thousand-year old Corporation itself and folding its functions into Westminster City Council. After all, the British people might reasonably ask, if you won’t respect our traditions, why should we respect yours?”

The quirky arrangements for local democracy in the City leave it vulnerable. The custom is that party politics are considered infra-dig. So mostly independents are elected. With the assumpion that they will be honoured to be the custodians of its heritage. The difficulty comes when those sneaking in with the “independent” label embark on a mission of self-destruction.

My advice to the City of London Corporation – or any other local authority contemplating an anti-heritage drive – would be instead to devote its efforts to combat modern slavery. The Modern Slavery Act of 2015 included a duty for councils to identify victims. There are estimated to be 10,000 in this country – trapped in domestic servitude or the sex industry. Often the perpetrators are involved in benefit fraud, arranging forced marriages, or providing substandard housing. Would not the most effective application of moral indignation about slavery be to catch the culprits and free the victims – in such districts as Tulse Hill Ward, Lambeth? Rather than fretting about it being named after Sir Henry Tulse, who was Lord Mayor of London in 1684.

How many slaves are trapped in all those awful flats in The Barbican?