Economists consider whether City is socially useful
Published 26 July 2012
JustShare and the St Paul's Institute brought two economists before an audience of City workers last night to consider whether the nation is over-indulging in 'banker bashing' or whether the system is broken.
Raquel Hughes, of TheCityUK, argued that the City was still socially useful, employing two million people and contributing £63bn in taxes.
She said the City provided a whole range of services that people could not live without, from ATMs and mortgages, to insurance and loans for small businesses.
Whilst acknowledging that some mistakes had been made, Hughes argued that it was the culture rather than the system that needed changing.
The financial services sector is the UK’s largest export earner and it would be madness to "kill the goose that lays the golden eggs", she said.
Tony Greenham, of the New Economics Foundation, agreed that the City was socially useful in many ways, but argued that there was a need to identify and eliminate the aspects that are socially destructive, such as tax havens and commodity speculation.
He questioned whether having a global financial centre in London really added social value, on the grounds that the financiers pocket the profits in the good times while the taxpayer must foot the bill for the bailout in the bad times.
While Hughes suggested that trust could be restored to the City with time, Greenham argued that it would be impossible to restore trust in the City unless the City itself became more trustworthy. That, he said, required more reform, more transparency and a greater ability to suppress the socially harmful elements of the City
The debate was chaired by Anne Kiem of the IFS.
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