Brexit deadlock causing uncertainty in financial services industry

Labour Party

Yet again the business industry is reporting an uncertain future post Brexit.

A report published by the CBI and PwC has found that growth in the UK financial services has stagnated and, they say, this is directly related to the uncertainty over Brexit.

Furthermore, growth in other areas such as investment management and general insurance grew at what the report termed a “tepid” rate.

The other attributable factor is the slow rise in wages, which it is stated is holding back the economy.

However, the head of financial services for PwC stated that Brexit is driving uncertainty within the financial services industry.

The survey also revealed the level of concern within the sector surrounding Brexit and the specific concern within the banking sector. There is a level of apprehension in the banks’ ability to implement plans in time for Brexit; in fact a third of banks said they were “not so confident” of implementing Brexit plans by March.

Further concerns revealed that many companies are worried about the status of cross border contracts.

While the Bank of England (BoE) has put in place billions of pounds in cross border derivatives contracts to avoid market disruption, the BoE is still awaiting confirmation from the EU that it will reciprocate this plan.

Calls from within the financial services industry are clear – the Government must develop a specific strategy for the financial services industry in the scenario whereby Brexit does go ahead. The industry expects the Government to find an agreement with the EU which will continue to attract investment, jobs and develops the sector generally following Brexit.

However, Brexit is far from straight forward and the Government has still not significantly progressed talks on other matters which have been before it for many months. With just a matter of weeks until an agreement is expected it doesn’t seem hopeful that the Government will have the capacity to even get close to carrying out such talks.


Inspiring Women in the Financial Sector

Labour Party

The Bank of England opened its doors yesterday to 120 young women between the ages of 14-17 yesterday in an effort to inspire and encourage girls to consider a career in the financial sector.

Events like yesterday’s ‘career speed networking event’- part of the Inspiring Women Campaign-which London based school girls attended, help to breakdown the glass ceiling at a crucial point in their lives i.e. even before their careers have begun.

It is well known that girls and boys perform just as well in the early part of their careers but something happens after this and the likely reason is that for many women who have had flourishing careers to this point hit a glass ceiling, often following child birth or the presumption that they will take maternity leave at some point in the near future.

Introducing girls to inspiring women who pursue a wide range of careers, many of whom volunteered and attended yesterday’s event, shows that many talented women already have had interesting careers in the financial sector.

I hope events like these show that industries such as the financial sector are not the preserve of men, but are industries where everyone can aspire to join the career ladder regardless of gender or anything else.

The Organisation for Economic Development (OECD) published some startling figures earlier this year in a report that found 41% of British girls believe they are not good at maths; this compares with just 24% of boys. This crisis of confidence at this stage can drag girls overall performance down and stunts their career choices- something highlighted in the OECD report from earlier this year.

I believe tackling issues like gender disparity in the financial sector must start at school. We must give young women and girls the confidence to pursue subjects like maths, for example and encourage them to believe they can pursue careers in industries like the financial sector.

The Inspiring Women campaign is an excellent way to breakdown the glass ceiling and to encourage girls to consider careers they may well have discounted previously.

Bank of England appoints woman to number two position

Labour Party

The Bank of England has appointed Charlotte Hogg as its new chief operating officer. She is effectively to become the Bank’s number two to new governor Mark Carney and will take responsibility for the day-to-day running of the Bank overseeing everything from human resources to the Banks technology and operating systems.

It has been hailed a massive breakthrough for women in a notoriously male dominated industry. The news is of course welcome and it has been reported that Hogg was ‘handpicked’ personally by Mark Carney after he personally interviewed all the shortlisted candidates.

The Bank, however, is still a heavily male dominated operation. From the current governor (Sir Mervyn King), his three deputies, and the nine-strong monetary policy committee that sets interest rates along with the new 11-strong financial policy committee– all are men. And in addition the Bank’s court of directors has just one woman among the 12 ‘grandees’.

Aware of its image as a male dominated organisation, the bank has been quick to point out that a third of its middle and senior management positions are held by women, adding that this is up 50% on a decade ago. Other efforts have been made to address the problem internally and in 2007 a women’s network was set up. Its purpose is to support all women in their career progression at the Bank.

Supporting women in this way is extremely important and the network organises lunch-time panel sessions where women employees (and men) can share experiences and discuss solutions to perceived barriers to career progression. External speakers are invited to share their inspiring stories and additional support to improve specific skill sets.

This proactive approach will help to improve both the image but most importantly increase the number of women appointed to senior management positions.

Last year women made up 43% of graduates recruited into permanent jobs at the Bank up from 29% in 2011. The Bank recently won an award for the public-sector employer doing the most to create a pipeline of female leaders of the future.

With this positive approach perhaps appointments like Ms. Hogg’s won’t be an exception and will not be written about because it’s such a rarity for a woman to have been appointed into such a senior role.

The BBC World Service is important and should be properly funded

Labour Party

There appears to be no end to our economic woes. Britain’s economy slipped into its second recession since the start of the financial crisis around the turn of the year, and fears of a longer slump have been rising as companies hold back investment. What is more, there has been a sharp deterioration in the outlook for the global economy over the last six weeks.

All this has apparently caused Bank of England governor Mervyn King to back an extra £50bn of quantative easing,

Explaining his position to the House of Commons Treasury Select Committee, King said, “What has particularly concerned me in the last several months – why I have voted for more easing policy – was my concern about the worsening I see in the position in Asia and other emerging markets, adding “…my colleagues in the United States are more concerned than they were at the beginning of the year about what is happening to the American economy”.

According to the Guardian, Mervyn King went on to say, “We are in the middle of a deep crisis, with enormous challenges to put our own banking system right and challenges for the rest of the world that they are struggling with.”

It is now quite clear  that Britain has not recovered from the 2008/2009 slump that has left many Britons worse off, and fears are rising that another prolonged recession would do lasting damage to the economy.

You would have thought that the Tory-led Coalition Government would realise that it needs all the help it can get to make sure Britain’s interests are recognised in other countries and that the damage caused by the economic crisis is minimised across the world. One way of achieving this aim is through the soft power wielded by the BBC World Service.

The global impact of the World Service was, in fact, graphically illustrated last week when Burmese freedom fighter Aung San Suu Kyi toured the organisation’s offices, meeting many of the broadcasters she listened to while under house arrest  in Rangoon.

Unbelievably, at the end of 2010 the Foreign Office under William Hague decided to slash the World Service budget by around 20%, or £46m a year, by 2014. As a result the BBC in January 2011 confirmed plans to close five of its 32 World Service language services, estimating that audiences will fall by more than 30 million, from 180 million to 150 million a week.

As if this wasn’t enough, the BBC executive who runs the World Service, Peter Horrocks, has recently asked his journalists to come up with schemes to raise money.

This is surely no way to treat the World Service which truly justifies the over used soubriquet “national treasure”. The cut to its funding by the current Tory-led Government was a major misjudgement which totally underestimated importance of the World Service in boosting Britain’s standing abroad, a vital requirement in these perilous economic times.

I recently had an inkling of how the BBC is perceived when a Swedish MEP told me just how honoured and overjoyed he was to be invited on to the BBC “The Record Europe” programme. David Cameron, William Hague and the other luminaries in the Coalition Cabinet would do well to take such views on board. The BBC is the face and voice of the UK across the world and it benefits Britain enormously. It would be a real tragedy if political dogma were allowed to prejudice this huge asset.

Cameron should show less arrogance towards Eurozone leaders

Labour Party

Unwilling and seemingly unable to lift Britain out of our damaging double-dip recession, David Cameron is taking refuge in attacking the Eurozone.

This is not the first time our Tory Prime Minister has lectured, no to say, harangued Eurozone leaders. It is obvious what he is trying to do this time. Cameron is patently trying to deflect attention from the dire condition of the UK economy by violently attacking our European neighbours.

Cameron’s words in the House of Commons yesterday, that Britain is impatient with Eurozone leaders and that they “either had to make up or it’s looking at a potential break-up” demonstrates his inability to understand just how closely the UK economy is tied up with the Eurozone. What happens in Greece and Germany has a massive impact on us.

Mr Cameron would do well to behave in a more acceptable manner to other European leaders. “Cameron should be working hard to get a deal rather than stoking fears of a Euro break-up.” This Labour source quoted in the Evening Standard yesterday hit the nail on the head.

Cameron’s arrogance and unwillingness to engage with European leaders does not even come from a position of strength. Britain is struggling with a double-dip recession thanks to the Tory-led coalition. What is it that makes Cameron believe he can attack the Eurozone when his own and Chancellor George Osborne’s economic competence is so severely lacking?

Meanwhile the Bank of England Chief Mervyn King has forecast an even lower growth rate for this year, down by a third from 1.2 per cent to less than one per cent, 0.8 per cent, to be precise, this year. All we can hope is that the good news yesterday from Ellsmere Port will help raise this figure.

It is becoming ever clearer that the UK   cannot go it alone. Our economy is well and truly tied up with the Eurozone. To believe anything else is to regress to some kind of post imperial cloud-cuckoo land when the EU did not exist and Britain was great.

While the UK is still a leading power in the world, we are also a member of the European Union and the majority of our exports go to Eurozone and other EU countries. To slag off these countries when the UK is faring as badly as we are is sheer folly and does nothing to build future relationships. Cameron, of course, behaves badly towards the EU to appease his feral Eurosceptic backbenchers, the “constituency” who supported him for the leadership of the Conservative Party.

David Cameron would do well to understand that he is Prime Minister of Great Britain as well as Leader of the Conservative Party. Now is the time, Mr Cameron, to put country above party for once.

The Eurozone avoids recession after the UK has sunk into double dip

Labour Party

The first meeting between President Hollande and Chancellor Merkel ended with a show of unity, at least on the surface, and a joint view that Greece should stay in the Euro. Meanwhile, as IMF head Christine Lagarde adds her voice to those who think Greece may have to leave the single currency, the Eurozone remains in crisis. The result of the next round of elections in Greece will be crucial for both that country and the Euro itself.

It is important at what may turn out to be the crossroads for the Eurozone that those who make these decisions do not get caught up in the general air of panic. There is no doubt the atmosphere in Europe is febrile, while the Merkel/Hollande meeting is being described as sober.

Yesterday I argued that Europe’s leaders must take on board the results of a recent poll in Germany as well as the national elections in France and Greece which produced winning results for candidates opposing austerity. Fortunately it looks as if this may be sinking in. Horst Seehofer, head of Germany’s CSU Party, sister party to Merkel’s CDU, is now calling for some element of growth.

Yet the Eurozone crisis and the problems in Greece are taking place at the same time as the Eurozone is keeping its head above water as far as recession is concerned. It was announced yesterday that the Eurozone had avoided recession thanks, interestingly, to stronger than expected German growth. Even France, sometimes seen as a problem due to its 35 hour week and generous pensions, recorded neither growth nor contraction.

This is not, of course, the case in the UK. At the end of April we were informed that the British economy had again sunk into recession putting us into the unenviable double-dip category. David Cameron, of course, blamed the Eurozone crisis. This claim looks less than tenable in the light of the Eurozone’s ability to avoid recession itself. In fact, according to a recent Sunday Times/YouGov poll 32% of people blame the return of recession on the Tory-led coalition.

Cameron and Osborne have, in fact, been fortunate that the Eurozone crisis has taken attention away from the British economy. Our economy is not doing at all well, as those who have lost their jobs and the young people who cannot find employment will tell you. In addition, the Bank of England has today revised its forecast for growth downwards. We are, in fact, seeing a re-run of the decimation of our society last seen under Margaret Thatcher in the 1980s.

The British people are, however, cottoning on to this. The local elections on 3 May showed beyond a shadow of doubt that they preferred Labour under Ed Miliband to this Tory-led coalition. Labour is on the way up, the Tories are going down and the beleaguered Liberal-Democrats seem headed for electoral wipe-out.

Women suffer most as we all become worse off

Labour Party

It’s usually women who suffer disproportionately when governments take it upon themselves to make those who elected them suffer the indignities and privations of excessive austerity.

Sadly this has been confirmed yet again. The number of women claiming unemployment benefit is going up due in some part to job cuts in the public sector beginning to bite. And it’s not been helped by single parents being forced off income support on to job seekers’ allowance (JSA) once their children turn seven thanks to the Tory-led government’s cut fast and cut now mentality.

New figures from the Office of National Statistics show that 474,000 women were receiving JSA in April and according to the International Labour Organisation there was a rise of 12,400 in the claimant count last month with three-quarters of them being women. This means that although the total of those on JSA went down, the number of women has risen significantly.

Meanwhile inflation is now higher than the growth in earnings.  According to the Bank of England’s central projection published a couple of days ago inflation will average just under five percent for the last six months of 2011. Conversely the Office for Budget Responsibility expects average earnings to rise by only two percent.

Unfortunately none of a surprise to those us who believe the Tory-led coalition is cutting too much too fast. Many people will be poorer as a direct result of this government’s deeply harmful and utterly misguided policy of slashing public spending at the speed of lightening with scant regard to its harmful effects.

Extreme austerity measures defy logic. Cutting people’s spending power means they put less money into the economy leading to a further downward spiral, not to mention a decline in the revenue from taxation. While I admit to being a fairly unreconstructed Keynesian, I have to say that in my 30-odd years in politics, which included the massive cuts during the Thatcher era, no-one has yet adequately explained how making people worse off is good for the economy.

If anyone feels like trying to convince me, please send me your answers, though not on the proverbial 1980s postcard. In order to keep up to date with the digital age, I will be happy with a comment on this blog.  

Meanwhile I firmly believe the two Eds, Miliband and Balls, have it about right – the UK economy needs to have some of the heat taken out of it, but at a pace which will not cause the harm we are now seeing as the Tory-led coalition continues its cavalry charge  against the British people.