There's so much anger out there about the financial crisis and bankers' bonuses. I understand this anger and I want to do something about it. But people don't seem to understand how difficult it is.
I've got a number of friends who sit on the boards of financial services companies (including quite a few who used to be fellow Members of Parliament). They have been able to explain to me the impacts of many of the reforms that have been suggested, and it would be madness to try to implement them. Not only would they massively reduce the tax revenue from the City of London but they would make no difference to the overall risk of the system because the same activities would just go on elsewhere.
I'm not in the business of making token changes. What would be the point of some sort of populist regulation that had no real benefits for anyone? But I am interested in this concept of trying to make the finance sector think more about how it can help to generate growth. That's why we're keen to make sure that the banks lend more, as a sort of quid pro quo for going easy on the regulation. If we can get strong economic growth going, then there will be more jobs and people will focus less on the fall-out from the banking crisis.
Of course, it would be good to see the UK develop a competitive position on new technologies in the future. Naturally, I am keen to make sure that we find ways to combat climate change more effectively (I'm not one of those people who don't think it's happening, or feel that it's too difficult to address). That will need a shift in investment and – yes – a different perspective on growth so that we measure whether it is using scarce resources effectively to deliver quality of life.
We get it. We've made speeches about it. The trouble is, when we say these things people think we're just finding ways to justify low growth. So our main emphasis for now must be on growth of any kind that gives more of our young people opportunities for skilled jobs. When we are back on a solid growth path we can start thinking about the other things we would like to have. Think about it. What happens if we're so busy creating a long-term future for the UK that we fail to deliver short-term growth and job prospects? Well, we won't get re-elected, for one thing, so it would be counter-productive.
Key points
• The revolving door. There is a cosy relationship between politicians and the boards of financial institutions that prevents robust and effective challenge.
• The mantra of growth. Economic growth is seen as the answer to all problems, and low-carbon, resource-efficient growth is seen as an unnecessary complication to be dealt with when the pressure is off. But it is precisely now that this refocus will have the greatest impact.
• Immediacy. Democracy delivers short-term solutions, not longer-term strategy.
Key actions
• We need to communicate more effectively about the types of jobs that will be generated in a low-carbon, resource-efficient economy, and the types of wealth that will be better protected (particularly environmental and social wealth that underpins our quality of life).
• Boards of financial institutions should be required to take on more people who are prepared to challenge the status quo.
Alice Chapple is director of sustainable financial markets at Forum for the Future
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