Between the lines: New financial body welcome as battered sector seeks to muscle up

Published on Monday 23 November 2009 21:20

IN OLDEN times, before banks erupted into molten fireballs and destroyed the earth, the contribution of financial services to the UK economy was championed by a body with the apt name of British Invisibles.

Its job was to explain to baffled journalists what it was exactly behind the tag of "invisibles" that every month seemed to save the UK balance of payments from drowning in a sea of red ink.

"Invisibles" was the tag under which was lumped together our earnings from financial dealings, insurance, tourism and overseas portfolio investment.

Compared with ball-bearings and bottles of whisky, this was an obscure part of Britain's overseas trade. But it contributed a thumping great surplus to the balance of payments every month.

"British Invisibles" morphed into a body called the International Financial Services London (IFSL). Throughout the 1990s and up to 2007, the boom years of the financial services sector made the need for education and promotion less pressing. But that, of course, has all changed.

Out of the smouldering rubble has now arisen TheCityUK. It is a new, independent, practitioner-led promotional membership body for the UK-wide financial sector. And yesterday its chairman, Stuart Popham, flew into Edinburgh to sign up support from top financial sector people here.

Despite fears that the name might be seen by Scots as little more than a City of London promotional body in disguise, TheCityUK has won endorsements from Standard Life chairman Gerry Grimstone, Aberdeen Asset Management chief executive Martin Gilbert and Scottish Financial Enterprise chairman Mark Tennant.

Popham, accompanied by TheCityUK director John Ingamells, a former Foreign Office diplomat, yesterday met Simon Thomson, chairman of the Chartered Institute of Bankers in Scotland, Lorna Jack, chief executive of the Law Society of Scotland, Anton Colella, head of the Institute of Chartered Accountants of Scotland and Owen Kelly, SFE chief executive. Popham, senior partner worldwide of law firm Clifford Chance, is in no doubt that the industry UK-wide now needs a powerful single voice.

"You cannot outsource the rebuilding of reputation", he told me between meetings yesterday. "This is for all of the UK industry, because we are all in the same boat. "

TheCityUK will promote the UK overseas, act as a source of information and advice and primary point of contact, support industry efforts to work with government and regulators and, in the wake of FSA chairman Lord Turner's recent questioning of the social utility of investment bankers, set out the industry's wider role in society and contribution to the economy .

But aren't there too many bodies trying to do this already?

That has been part of the problem . "One of our first tasks," he says, "will be to demonstrate that we are not an added layer or incremental organisation. We will rationalise."

The word he seeks to avoid but which crisply sums up this early work is de-duplication. TheCityUK will absorb both IFSL and take on the work of UK Trade & Investment's Financial Services Sector Advisory Board. This will become its overseas promotion arm, retaining sub-committees that deal with priority markets such as China, Russia, India, the Gulf and the United States.

Most in the financial services sector here in Scotland will recognise the need for pan-UK representation both at home and abroad. It should add strength to the industry's submissions on regulatory matters that there is a lot more to financial services than hedge funds in the City of London, and that in Scotland alone the sector employs more than 90,000 directly.

Equally, it will help Scots firms to have a UK-wide voice putting the industry's case and rebuilding the confidence and trust that has been badly shaken over the past two years.

One of the first tasks will be to appoint members of a broad advisory council and a board of directors. Initial funding will be provided by the City of London Corporation, but by April 2011 TheCityUK aims to become a membership organisation funded largely by the financial services industry.

That is much to be preferred to yet another Brownite quango spouting the government line of the day while the industry's concerns go unheard.