Polls throughout the mayoral campaign have shown a consistent pattern of support among London business. Steve Norris comes first. I come a close second. New Labour comes third or fourth. As London is not only one of the most important economic centres of the UK but, in the City, contains one of the great financial centres in the world, it is a result in which I take some pride. If it were not for the fact that Steve Norris benefits from the traditional links of the Conservative Party with business, I have no doubt that I would consistently beat him.
The level of popular support for my campaign in London starkly reveals as myth the Millbank spin doctors' claim that an intelligent left cannot be electorally highly attractive. But the level of support from industry and finance should equally give them pause for thought on why New Labour is coming third or fourth behind a public left-winger.
I don't disguise that leadership of the GLC gave me some initial personal links with the City and industry. But I pursued these not only because of the inherent importance of the question, but because I have always found personal relations with business relaxed and refreshingly realistic. This is because enterprise is concerned about key issues of substance and policy, not superficial hype of the "Cool Britannia" type.
A big business deals with billions of pounds. It has no choice but to be objective A tabloid newspaper can distort reality because it doesn't pay a direct price. But if a company acts on distorted information it goes bankrupt. Business wanted to know accurately what I was proposing and to convey their concerns.
That is why, among other reasons, for 10 years one of my main projects has been the publishing of original economic policy research bulletins and papers. The reactions, and the results at speaking engagements throughout that time, showed that business retained a keen interest in such proposals as how to lower the pound's exchange rate, how to avoid placing the tax burden on those with middle incomes, how to stimulate savings and ensure that the maximum of profits was ploughed into productive investment. Those concerns are now right at the centre of the issues affecting London's industry - in particular the threat of the overvalued pound.
I have no doubt that the really critical question over the next four years will be the City's relations with the euro. The mayor has no direct powers, but in terms of creating atmosphere and background, does have an influence. My strategic view is simple. Over the medium term, London cannot survive as Europe's leading financial centre if it remains outside the euro.
The trend is shown graphically in the loss by the London International Finance and Futures Exchange (Liffe) of the Eurobund futures contract to the German Eurex. This was no small question. The Eurobund contract is the largest futures market in the world outside that for the US Treasury Bond. Derivatives and futures are at the cutting edge of expanding financial markets, and this was a strategic setback for the City.
That is the type of issue affecting the City that I have discussed hundreds of times with business over a decade. In contrast, I cannot recall one business leader who ever raised with me the current obsession of tabloid headlines - my rather well-known disagreements with the IMF over third world debt, which are shared with such well-known radicals as the Pope.
Certainly the problems of economic convergence between the UK and Europe are real. One that I have been emphasising over the last 10 years, the divergence in investment rates, is narrowing. But others, lack of synchronisation of the economic cycles and different fiscal policies, remain. It is not possible to join the euro "tomorrow" - the reduction in UK interest rates, without corresponding changes in fiscal policy, would lead to dangerous economic overheating. But the economic course must be explicit.
Inevitably, Britain will eventually join the euro, and over a transition period, until that can be implemented, economic policy will be inflected to create the necessary economic synchronisation. Without that, over the next decade, the City cannot maintain its place as Europe's pre-eminent financial centre. That is the type of issue that the mayor is going to have to discuss.
What is left wing in all this? Simple. Unlike Steve Norris, I do not believe that private enterprise will by itself supply the infrastructure and services that a modern city relies upon. That is why I am implacably opposed to the privatisation of the Tube, for example. But the collapse of the city's transport system is not only a problem for Londoners; it is also an economic disadvantage to business. I personally am no longer surprised by how many of its leaders agree.
- More about:
- Central London
- Conservative Party
- Customs And Traditions
- Folk Tales And Myths
- Inner London Boroughs