Richard Lambert highlights importance of financial services to UK economy

Posted on 4 Sep 2009 by The Manufacturer

Richard Lambert, CBI Director-General, has outlined his views on the recent comments by Lord Turner concerning proposals for a “Tobin tax” and other financial issues.

Speaking at the CBI’s annual North East Dinner in Gateshead, he outlined the economic strengths of the region, highlighting its “characteristic grit,” symbolised by the Great North Revolution. Lambert praised Lord Turner for his grasp of the credit crunch, but also warned that the aspects of his interview for Prospect magazine which gained most attention are not the most important issues facing the UK.

“The fact is that Turner’s analysis of what caused the credit catastrophe, as evidenced for example in an Economist lecture earlier this year, is the best there is. And the Turner Review of Financial Stability is regarded from Wall Street to Tokyo as a model from which other financial regulators must learn,” said Lambert.

“However, it’s not his job to be a cheerleader for the City of London. The FSA is a regulator, not a trade association. And if the world’s financial regulators had been more challenging and aggressive in the past decade, then the financial sector without doubt would be in a lot more healthy shape than it is today.”

While Lambert said that he disagrees with the suggestion of a Tobin-style tax, he also sees the issue as largely irrelevant at the moment. “You may or may not be in favour of a Tobin-style tax on financial transactions: for the record, I am definitely not. But as Adair Turner himself acknowledges, you’d have to be mad to impose such a levy unilaterally without it being imposed at the same time in the rest of the world. Since there is no chance of this happening, this is not a point on which to linger,” he said.

Lastly, Lambert highlighted the strengths of the North East’s economy, saying: “You only have to look around the companies represented here tonight to see how much more diverse the economy has become over the past decade or two.”

“It’s much less dependent than in the past on a few heavy industries – it’s successfully rebalanced large chunks of its manufacturing sector, for example from coal to renewable energy, or from shipbuilding to the marine and sub-sea sector.”