The Guildhall, in the heart of the City of London, has been a vital commercial centre for hundreds of years. The main building, in which the Prime Minister will this morning address an impressive gathering of CEOs and investors, dates from the 15th century and a time when powerful merchants exercised huge influence over the emerging laws of the land.
More than 500 years later and a new incarnation of this merchant class continues to hold the fate of nations in their hands. Decisions over where to invest, where to build, where to place long-term bets and where to avoid send powerful signals about where a country stands, and – to an extent – how its government is viewed.
The UK’s ability to attract inward investment, even during periods of domestic political turmoil, has been remarkable. The inflows declined during the height of the Brexit drama, but even then there were certain sectors that appeared reasonably immune. Keir Starmer will today trade on a “stability dividend” – and of course, stories about a chaotic Downing Street comms operation and who got free Taylor Swift tickets do not constitute national instability.
The UK is indeed stable where it counts; in the rule of law, the relative strength of its equity markets, its lack of political extremism, its human capital and generally supportive and predictable regulatory regime.
The truth is one doesn’t have to travel very far to find markets where these conditions are not as obvious or reliable.
The government will gain political energy from today’s summit and the nation will gain an economic boost, too. Downing Street has told journalists to look out for announcements “throughout the day” from a range of government departments.
Starmer’s speech today will also hit all the right notes. It will be a combination of his greatest hit, “Going for Growth” spiced up with some new material from an upcoming album provisionally entitled “Regulatory Reform.” Let’s see if it gets the Guildhall audience on its feet.
Joking aside, we should all welcome the investment decisions around which this summit appears to have been organised, whether or not we welcomed the current government. But the theatrics of today also raise an interesting question; is this international investment flowing in because of this particular government, or in spite of it?