Bunhill: Leaving Lehman on labour of love

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The Independent Online
SINCE time immemorial, the City has been a bastion of loyal Tory support - even though Maggie herself never really liked the place. So you may be surprised to learn that it has its share of crypto-socialists; it's just that they're so heavily disguised in grey pin-stripe as to be all but invisible.

From September, their number will fall by one when Gerald Holtham, international economics guru at Lehman Brothers, leaves to head the Institute for Public Policy Research, the Labour party think- tank.

A City slicker volunteering to run Labour policy? Money is not a motive since Holtham admits his salary at the IPPR 'won't even have the same number of noughts' as his remuneration at Lehman. Perhaps, though, think-tanks are addictive: the 49-year-old Holtham did a stint at the Brookings Institute, the venerable Democratic think-tank in Washington, as well as 10 years at the OECD in Paris, before plunging into the City in 1987.

But Holtham is also a man with a mission: 'The modern Labour party is pretty bleached out as far as pink is concerned. There's even a lack of conviction. Labour has to be a radical reforming party.' In particular, he wants to sort out how to bring down unemployment and reform taxation to produce a more humane and economically rational system.

How many other pinkos will be left in the City once he's gone? Only two, according to Neil Mackinnon, chief economist at Citibank: 'Me and Gavyn Davies.' Davies, once an adviser to the former prime minister James Callaghan, is now paid more than pounds 1m a year as a partner and chief economist at Goldman Sachs.

As far as prominent economists are concerned, Mackinnon is probably right. But among lesser-known City types the pink tinge has spread wider. In the late 1980s, for example, a gaggle of centre-left sympathisers formed the Smithfield Group, which attracted around 100 people to its inaugural meeting.

Given the traditional British suspicion of champagne socialists, it might seem surprising that so many manage to survive in the City. Mackinnon plays down the conflict: 'I've always found the Square Mile a very meritocratic place, where you get rewarded for your talents rather than your political views. Citibank employs me because I'm one of the best economists in the City.'

You have been told.

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