City of London

Mr. Fraser, it is a great pleasure to serve under your chairmanship, although I fear that we are both absentees from the Select Committee on Northern Ireland Affairs this afternoon. I hope that the Chairman will forgive us. About two years ago, I went on a course entitled "An introduction to the City", organised by the excellent Industry and Parliament Trust. During week 4, one of our number—there were meant to be 10 of us there—was missing. That person turned out to be my hon. Friend the Member for Burnley (Kitty Ussher). We inquired as to her whereabouts and found that she had been made Minister with responsibility for the City after just three weeks on the course. I did not receive similar preferment; I just got a certificate at the end of the period. I am glad that my hon. Friend the Member for Portsmouth, North (Sarah McCarthy-Fry)—the successor to my hon. Friend the Member for Burnley as Exchequer Secretary to the Treasury—will be replying to the debate. Her rise has been similarly meteoric. At one stage in the summer, for one week, she was in the Department for Communities and Local Government and, having solved all the problems there, was rightly promoted into the Treasury. I suspect that her meteoric rise will continue. She is a tweeter on Twitter with 400 followers and it would be the height of my political career if today's debate got a little mention in a tweet later on. Yesterday, in the Library, an hon. Member asked me, "Why are you interested in the City? What is behind this debate?" I could have mentioned the Industry and Parliament Trust course that I attended, or my economics degree—half an economics degree; I got the other half in history—but I should have said that the City has an impact, for good and bad, on the whole of our economy. That is as true for a northern Member of Parliament as for any other MP in the country. The City has much to take pride in, including its history and the fact that, every day of the working week, 340,000 people pile into the City, which has a resident population of only 8,000. The City should take great pride in underwriting ventures across the world, providing seed corn and capital to entrepreneurs starting up new ventures and businesses in each generation. Equally, the relatively mundane business of making markets, providing liquidity and dealing in foreign exchange all have their value in a market economy. Some of my best friends work in the City. Another virtue of the City in recent years is social mobility, of a kind. The background of people who work in the City has been transformed in the past 20 or 30 years, since the big bang. I chair the all-party group on Ukraine, which has led me to a new understanding of the internationalism of the City and how people from all round the world work there, contributing to all sorts of firms and often returning to work in their home countries with an understanding of Britain and our economy. All those things are to the good. I am an avid reader of the Financial Times and have been since my first Labour party meeting at the age of 15. I sat through the meeting and, at the end, one of the older members of the party—there were only about 10 there—who was well into his 70s beckoned me over and asked what paper I read. I told him that I read The Guardian and he asked why. I knew that he did not have much of an education himself, so I thought, wrongly, that perhaps he was saying that I should read The Mirror or something like that. But he said, "The Guardian is biased." I asked what he meant and he told me that he always read the Financial Times, which was his paper of choice. He said, "It has to tell the truth because the political and economic elite read it, so this is the paper you should read, my boy." I have to say that although I have stuck to The Guardian—there is something about reinforcing our own prejudices, is there not?—I also read the Financial Times occasionally. Over the summer, it has indeed been the paper for people to read if they have any interest in the City. Lord Turner of Ecchinswell, chairman of the Financial Services Authority, made a remarkable speech earlier this summer questioning the social usefulness of parts of the City. I realise that I am quoting him selectively, but let me read a couple of lines from his speech. He said:""Parts of the financial services industries need to reflect deeply on their role in the economy, and to recommit to a focus on their essential social and economic functions, if they are to regain public trust"." Lord Turner continued:""there are good reasons for believing that the financial industry, more than any other sector of the economy, has an ability to generate unnecessary demand for its own services—that more trading and more financial innovation can under some circumstances create harmful volatility against which customers have to hedge, creating more demand for trading liquidity and innovative products; that parts of the financial services industry have a unique ability to attract to themselves unnecessarily high returns and create instability which harms the rest of society."" That remarkable speech was given in the Mansion House. He got to some of his audience, because they started criticising him in The Daily Telegraph in the days following the speech for the way he tied his bow tie. Apparently, he is a clip-on man. I am a clip-on man as well.