Business

City of London’s top official says financial hub ready for ‘pro-business’ Labour Party

Chris Hayward recently began lobbying to set up a body like the IDA in the UK

Policy chair of the City of London Corporation Chris Hayward: There is a need to rebuild trust between the UK and EU, after 'a lot of harsh words' over the years by politicians.

Joe Brennan
Wed May 29 2024 - 06:15

The City of London is ready for a Labour government, as the main UK opposition party canvasses on economic stability after 14 years out of power, according to the top official at the governing body over the Square Mile financial district.

Chris Hayward, policy chair of the City of London Corporation, also told The Irish Times during a visit to Dublin on Tuesday for meetings with local financial firms that his organisation was pushing for the development of a UK equivalent of IDA Ireland.

“This will be, potentially, a pro-business government, if indeed it is a Labour government,” Mr Hayward said, adding that his organisation was “ready for whichever party we’re given” after the general election on July 4th.

“Whoever takes power in the United Kingdom is going to have the same challenge: there is not a lot of money in the treasury. How do you get economic growth, new jobs, new businesses and new tax receipts, ultimately, to fund public services? And the answer is that government will need to work much closer with the private sector, the City, and financial institutions, in order to generate growth.”

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Keir Starmer has spent his four years as Labour Party leader moving it towards the centre, after it veered to the left under his predecessor, Jeremy Corbyn. His finance spokeswoman, Rachel Reeves, who has been actively wooing business executives over the past year, said in a speech on Tuesday that her party is “pro-worker and pro-business” and reiterated a pledge that corporation tax would be capped at its current rate, at 25 per cent, for the duration of the next parliament.

More than 120 UK business leaders gave their backing to Labour in an open letter, published in the Times of London on Tuesday, saying it had shown it had changed and should be give a chance to govern.

“We, as leaders and investors in British business, believe that it is time for a change,” said the letter, with signatories including the heads of retailer Iceland, the UK arm of advertising giant WPP, and former vice-chairman of lender JP Morgan Cazenove. “We are in urgent need of a new outlook to break free from the stagnation of the last decade and we hope by taking this public stand we might persuade others of that need too.”

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The Conservative Party, traditionally seen as the party of business, is currently trailing Labour by more than 20 percentage points. Prime minister Rishi Sunak’s party has about 23 per cent support, according to an average of polls over the past 10 days.

Meanwhile, Mr Hayward has recently begun lobbying for the establishment of a UK body like the IDA to attract foreign direct investment, initially into the financial services sector. “Ireland does it pretty well,” he said. “We haven’t really focused in on this in the same way. There is a real opportunity.”

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He also said there is a need to rebuild trust between the UK and EU, after “a lot of harsh words have been said over the past years by politicians”. The UK left the union in 2020 without a deal covering financial services. Subsequent clashes between both sides over Northern Ireland trading protocols slowed down the potential for the City of London to eventually regain EU access.

A new forum between both sides on regulatory co-operation – set up on the back of the Windsor Framework, adopted last year to smooth out trade issues in Northern Ireland – only held its second meeting last week.

“These six-monthly forums are a useful starting point,” he said. “It’s going to be a slow burn.”

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

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