In the years before the 2008 financial crash, Britain allowed the development of a financial system which was paying bankers handsomely for taking too many risks. It had grown so large that the then recently appointed head of the City regulator, Adair Turner, described much of the Square Mile’s activities as “socially useless”. Memories are short in government, however. The City reforms proposed earlier this month by the chancellor, Jeremy Hunt, will unfortunately squash whatever useful functions finance provides in favour of its useless ones.
Britain’s departure from the EU should have been an opportunity to rethink the country’s stagnant economic model and reduce its reliance on the City. Instead the finance sector has used its influence to see off any threats to its dominance and then loosen the bonds that currently constrain it. Whatever the promises to tame finance, little has changed. The sector remains the same size, as a proportion of UK economic activity, as it did in 2008. In some ways it’s got better for bankers. Their bonuses have doubled. The banks that were deemed “too big to fail” are now even bigger than they were.
