Allen Simpson is one of those “bankers” who’s not a banker exactly. Yes, he works for a bank (Barclays). Yes, he’s based at Barclays’ Canary Wharf head office rather than at a branch in Croydon, but he doesn’t work in a front office banking job in M&A or sales and trading. – Simpson is Barclays’ director of public policy. As such, he advises Barclays’ chairman John McFarlane on public policy issues and Barclays’ political reputation. In his spare time, he also gets to indulge in his passion for politics, and specifically, for the British Labour Party.
Simpson runs “Labour in the City,” a membership organization for supporters of the Labour party who work in financial services. Set up in 2009 by Kitty Ussher, a former junior treasury minister who was sacked during the expenses scandal, it has 600 members – up 50% from when Jeremy Corbyn took over as leader in September 2015. “People in the City have been energized by the politics of Jeremy Corbyn,” says Simpson.
Labour in the City isn’t restricted to “bankers.” Simpson says members include employees of the Big Four accounting firms and law firms as well as people working in the “head offices of investment banks.”
“Our evening events are regularly packed out,” he says. John McDonnell. the Labour shadow Chancellor who’s accused the City of, “frenetic, madcap speculation,” spoke at one last year. “John is a serious man with whom you can have a serious conversation and our members recognize that,” says Simpson. He adds: “The City is internationalist and there’s a parochialsim and nativism about the current Conservative government that I don’t think goes down very well here. Plus the City backs winners…”
Jeremy Corbyn isn’t a winner yet (except within the Labour Party) but he may well be come the next election. Nonetheless, finance professionals’ enthusiasm for the Labour leader seems unexpected in light of Corbyn’s historic aversion to banking and recent assertion that Labour is a threat to Morgan Stanley. People in the City understand where Corbyn is coming from, explains Simpson – especially if they’re young. “You might be a new graduate earning £70k, but you still won’t be able to afford a flat in London if you don’t have a deposit,” he says. “People earning six figures aren’t in a position to buy property here.”
Even so, the City’s enthusiasm for Corbyn’s Labour Party shouldn’t be exaggerated. There are 454,000 people working in the City; Labour in the City’s members are therefore a drop in the finance ocean. It’s also telling that Momentum, the grass roots organisation behind Corbyn’s success doesn’t have a City of London branch.
Simpson suggests this is because finance professionals are too old: “When I went to a Momentum event, it was full of exciting, energetic, lovely 19 year-olds. The City is full of slightly grumpy 26 year-olds.” It may also be because City Labour supporter aren’t exactly clamouring for a socialist revolution. “The City is free market social democrat,” says Simpson. “It’s people who pay their taxes, but believe the free market creates wealth.”
Despite McDonnell’s famous claim that one of his recreational activities is, “fomenting the overthrow of capitalism,” Simpson says a Corbyn government is all for free market social democracy too: “The 2017 manifesto was all about social democracy…A social democratic restructuring of our economy represents rather less of a risk to Britain than Brexit does now… There are big questions about whether the current tax system, based on 1980s assumptions, works any more.”
Labour’s 2017 manifesto promised to increase the taxation of high earners and McDonnell has proposed a new tax bracket of between £80k and £150k. Junior bankers and middle or back office staff would be prime candidates for a tax at this level, but Simpson says members of Labour in the City are absolutely supportive all the same: “A lot of people who work in finance have done better than they expected to. Many of them have a social conscience and would be happy to see their income taxed at an appropriate level to help the next generation.”
Ultimately, however, Simpson says Britain’s approach to taxation needs to move away from income: “The tax burden needs to move to wealth as things evolve.” While junior bankers trying to buy first homes might support a wealth tax, senior and mid-ranking bankers with years of accumulated bonuses behind them are likely to be a lot less keen. Labour in the City’s appeal may well be restricted to VPs and below.
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