London roadmap fails to address key points

A new report drafted by government officials and city grandees assesses the future for UK-based financial services, but misses addressing the key points of taxation or a super-regulator

LONDON - A group of government officials and city grandees, co-chaired by Sir Win Bischoff, the former Citigroup chairman, and Alistair Darling, the UK Chancellor of the Exchequer, was charged with producing a roadmap for the future of London's financial services sector over the next 15 years. Membership included Dame Clara Furse, outgoing chief executive of the London Stock Exchange, Lord Levene, chairman of Lloyd's of London, and David Blizter, of private equity group Blackstone. However, the final report published smacks of a compromise between city members and government as it omits any criticism of the controversial rise in the top rate of tax to 50p in the pound or any assessment of how the City would be affected by the creation of an overarching regulator.

Shadow Chancellor George Osborne was one of the first to criticise the report: "I am a little disappointed that it has not gone further in addressing some of the big issues we will need to get right if financial services are going to recover and prosper. It is increasingly clear that the Labour government won't provide answers."

Writing in the Wall Street Journal, Win Bischoff commented that better regulation of the banking system was needed to keep London and the UK competitive.

He said: "There are important lessons to be learnt, by regulators, governments and by the banks themselves. But we believe the UK can play a key role in setting a new global standard.

"No one wants regulation that stifles innovation or prevents wealth creation. But at the same time, no one wants to see banks taking excessive risks that can bring the whole system down. This is not an easy balance to strike but it is one we need to get right."

"Across the world, we are seeing the most disruptive financial crisis in generations, which has completely shaken up the global financial services industry," he said.

"Our goal is to maintain a competitive and vibrant sector in Britain.

"At the core of our analysis is the realisation that maintaining Britain's position as a world centre for financial services must not come at the expense of other countries, but by working in partnership with them."