JustShare and St Paul’s Institute ask “Is the City socially useful?”
‘Is the system broken or is it just the people?’
On Wednesday 25th July, JustShare and St Paul’s Institute hosted a controversial debate asking: ‘Is the City Socially Useful?’ Have we fallen into a trap of constant ‘banker bashing’ or have we given the financial services industry too much power?
Raquel Hughes of The CityUK argued that the City is socially useful, employing 2m people, contributing £63bn in taxes and providing a raft of services we could not live without (ATMs, mortgages, insurance, lending for small businesses) as well as fuelling much personal and institutional philanthropy. She accepted that some mistakes had been made but argued that these called for a change of culture rather than a change of the system. The financial services sector is the UK’s largest export earner and it would be madness to ‘kill the goose that lays the golden eggs.’ Instead we need to improve the eggs it lays and create a culture of doing the right thing. It is, she said, time to restore trust in the City.
Tony Greenham of the new economics foundation agreed that the City is socially useful in many ways but argued that we need to be much more rigorous in identifying and suppressing the areas which are not socially useful and particularly the areas which are socially destructive; for example, tax havens and commodity speculation. He questioned whether having a global financial centre in London really adds social value – especially when the financiers pocket the profits in the good times and the taxpayer foots the bail out in the bad times. He argued that it is impossible to restore trust in the City until the City itself becomes more trustworthy. That, he said, requires more reform than anyone will admit, more transparency and more muscle in suppressing the socially harmful and useless elements of the City and supporting the genuinely socially useful elements.
With Anne Kiem of the IFS in the chair, an audience of City workers and those interested in development and justice asked some wide ranging questions: ‘Hasn’t the City always been exploitative?’ ‘Would a shift to longer-term thinking help?’ ‘What is the role of shareholders in making the City more socially useful?’ ‘Is the system broken or is it the people who are broken?’ Discussions continued over Fairtrade wine generously sponsored by La Riojana.
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