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Good morning. When is a bang not a bang? When it’s an “Edinburgh reform”! From Edinburgh, Jeremy Hunt will lay out the government’s 30-point package to boost the City of London today and secure a rare “Brexit dividend”. Some thoughts on the politics of it all below.
Redrawing the rule book
Are the UK government’s Edinburgh reforms a good idea? Helen Thomas was sceptical of one of the measures, the loosening of the UK’s “ringfence”, which requires lenders with more than £25bn to separate their consumer operations from their riskier operations. Andrew Griffith, the City minister, sets out his thinking and that of the government in an interview with the FT.
Is it a good set of policy proposals? I defer to City Bulletin for that. In the briefing this morning (premium subscribers can sign up here), Cat Rutter-Pooley rations her enthusiasm for the reforms: “Just don’t call the overhaul Big Bang 2.0. Or make any jokes about them being more of a whimper.”
As far as the politics goes, there are risks for both parties. The temptation for the Labour party — which at least some of its backbenchers will fall into — will be to echo the concerns of those who think it’s all terribly risky and to talk about how the Conservatives’ first instinct is always to help “the bankers”, which is always a popular position to hold politically.
The risk to Labour here, though, is that it blurs the “we love business” message that Labour wants to convey. Any Labour attack on bankers or the wealthy (both areas in which Labour’s instincts chime with the public) reminds voters of Labour’s attitude and vulnerabilities on tax (where its instincts aren’t quite where the public are).
At the risk of looking very stupid, I suspect that where Keir Starmer and Rachel Reeves will land on this is to sound roughly identical to Rishi Sunak and Jeremy Hunt, on the grounds that they are best served by sounding as if at every turn, Labour will match or exceed the Conservatives’ ambitions on growth.
The proposals also carry risks for the Conservatives in general and Rishi Sunak in particular. It’s a reminder of an old, old, old Tory vulnerability: the perception among most voters that the party governs in the interests of a rich few. At a time when cost-of-living pressures are ever more acute, this image is an especially big weakness. (If you haven’t already, do read this excellent long piece by Alexandra Heal and Anna Gross on the women being forced into the sex trade as a result of those pressures.)
Some Conservatives want to present these measures as a “Brexit dividend”, which carries risks of its own. One potential pitfall is that this dividend gets support from people who don’t like Brexit, and is disliked by those who actually voted for Brexit. That could mean that anyone in favour of the government’s measures hears the words “Brexit dividend” and then switches off.
It’s particularly challenging for Sunak because the usual line to take for a wealthy politician — that Britain is great, their wealth is a product of Britain’s greatness and that their wealth helps to maintain Britain’s greatness — doesn’t really work when most of your wealth comes to you via marriage. Of course, it’s true to say that Sunak would still be pretty wealthy had he not married heiress Akshata Murthy, but that doesn’t really matter for these purposes. What matters is that he hasn’t yet found a language and a narrative about his wealth that works for him, and until he does he will be especially vulnerable to this line of attack.
Now try this
I am really enjoying Spiritfarer, a management game in which you are given the job of successfully ferrying departed souls to the next life. You have to maintain your boat and keep your charges fed and happy while fulfilling their final wishes. It has a wonderful soundtrack, too.
However you spend it, have a wonderful weekend.
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