by Kurt Barling
鶹Լ London's Special Correspondent
Mansion House has been a venue for the Lord Mayor’s hospitality for the best part of 250 years. The pageantry of the occasion is quite impressive. Each of the couple of hundred guests greets the Mayor and Lady Mayoress after proceeding through a guard of honour of men with muskets, breast plates and lances.
Britain has always been good at invoking the spirit of continuity. It has to be said quite often in the face of calamity.
No amount of champagne and canapés, however, can wash away the unpleasant taste of discontinuity in the City at the moment. Not only are thousands of jobs being shed, but many more are under threat. Important financial institutions have failed and many more are struggling to get their bearings again after months of ongoing financial shocks.
"No amount of champagne and canapés, however, can wash away the unpleasant taste of discontinuity in the City at the moment"
Kurt Barling
Let’s not forget City institutions are currently benefiting from shed loads of taxpayer funded cash injections that make every struggling British manufacturer wince. The government knows full well a collapse in the banking sector would do untold damage. Although no-one quite has the gumption to admit they don’t know how to get out of the current mess.
The current Lord Mayor, Ian Luder, is a plain speaker and a prudent man. That’s hardly surprising since he is an accountant by trade with a particular expertise in taxation issues.
He’s also a Londoner from humble beginnings who goes to great lengths to remind people that he recognises hardship when he sees it. He described, to the assembled audience of the great and the good of London government, a current calamity of 1929 proportions. He said the challenge was to find acceptable ways of navigating the recession and preventing our bad times dipping into a full-blown depression.
Luder said the way the City did some things would have to change. Clearly code for greed can no longer be the creed. A bonus “culture” cannot be allowed to thrive unfettered. Financial institutions must begin to act more responsibly and reassess their approach to risk.
The Lord Mayor is keen that City institutions recognise this themselves. The age of excess is temporarily passed. The government is now, once again, a key stakeholder in the City and there will inevitably be more oversight in the way financial institutions conduct themselves.
The Financial Services Authority - the financial services regulator - is being beefed up and the government has plenty of time to exact its price for past and future mismanagement.
The Lord Mayor knows that the City’s reputation is a key to future inward investment and the marketing of City expertise overseas. If the City is to survive in an increasingly competitive global market it needs above all to keep its reputation intact.
During his 12 month term of office the Lord Mayor’s key responsibility is in fact to head trade delegations from the City across the globe. He’s already led one delegation to Morocco and has several more to conduct throughout 2009. He is only too aware of how crucial it is that the City offers the right environment in which the multinational corporate world can thrive.
It is a touch ironic that the target of the Lord Mayor’s charitable efforts this year is raising financial literacy amongst school children. In an interview a few months ago I asked Ian Luder if a dose of this medicine shouldn’t be offered to some already in the City. He was very diplomatic, simply offering a wry smile.
This year’s event was the first that Mayor Boris Johnson attended. He was warmly received; there was even a suggestion of a suppressed cheer. It was an opportunity to lay out his 2009 stall. His support of Crossrail and other public transport infrastructure investment was made abundantly clear.
What he also made clear was his view that those in publically funded office have obligations in such difficult times to support private enterprise in its creative endeavours to get out of the recession in one piece.
Curiously for a Conservative Mayor Boris seemed to be advocating an interventionist style of London government to deal with issues like the housing shortage, environmental degradation and wealth creation. What’s abundantly clear is that Boris and his team of advisers are learning on the job.
"The City of London remains an important part of the British economy. It is absolutely vital to the London economy, particularly in terms of employmen"
Kurt Barling
That’s tough when the environment you operate in suddenly changes with an economic downturn. Boris is a raconteur par excellence and he betrays all the enthusiasm of the congenital optimist but a number of the people I spoke to at the dinner felt he remains short on vision.
Mayor Boris’ stumble in his attempt to introduce economic theory into the proceedings was, to say the least unhelpful. It confused his audience as much as himself. He invoked Ricardo’s Law - David Ricardo was an 18th century economist who wrote about the law of diminishing returns - but within a few sentences Boris tongue-tied and unable to apply Ricardo’s theory to his analysis of how business in London could navigate its way out of bad times.
Throwing ideas like this around maybe good when you’re writing for a living but not when you are trying to lead a City.
The Chairman of London Councils, a body that represents all 32 London boroughs, did make some practical points about the ongoing realignment in London politics. Merrick Cockell reminded the audience that the conduct of local authorities across the capital in tough times is critical to the well-being of Londoners.
Cockell argued to be more effective, government thinking and government action, needs to be joined up. In London that means that the local authorities and the Greater London Authority with Mayor Boris taking the lead must work more closely together to foster the capital’s economic recovery. Despite the elixir of after dinner brandy, there was unsurprisingly no magic potion on offer.
The City of London remains an important part of the British economy. It is absolutely vital to the London economy, particularly in terms of employment.
As the Capital’s great and the good departed Mansion House on a cold winter’s night they must have been genuinely worried about how many of the City’s financial institutions will weather the current chill global economic winds before the milder climate of recovery returns.
