A FTSE CEO client once said to me, “Your job is simple. Don’t EVER put me in front of the Treasury Select Committee”. It was the height of the financial crisis, and parliamentary scrutiny on top of a media savaging was the last thing he wanted.
Those three little words – now abridged in my mind to TSC – continue to strike fear into the hearts of those titans of the City. For years before the financial crisis the power of parliamentary committee to ruin reputations and bring down the great and good became legendary. A raised eyebrow from the chair of the Treasury Committee packs as much punch as one from the governor. Perhaps even more so.
Throughout the noughties, the TSC was led by Labour’s John McFall. It was at that time the chair of the committee got its moniker ‘all powerful’. For he was not afraid to bring down those captains and ask some equally hard questions of his own Labour government and the then Governor of Threadneedle Street when the financial crisis unfolded.
For most of this decade, the TSC has been run by Tory Andrew Tyrie who stepped down at the June election this year. Tyrie’s claim to fame was to push George Osborne to introduce a strict senior manager regime for the leading executives in financial institutions. As a politician, he was attempting to place the bad guys of the sector into an orange jumpsuit in the public consciousness.
So the TSC now has its first woman in the chair: Nicky Morgan. And like her predecessors, she means business. A former cabinet minister, she was Education Secretary under David Cameron. She considered running for the Tory leadership and had some significant backing, but bowed out and headed to the back benches when Theresa May entered Downing Street. But rather than sitting it out, Morgan has come into her own.
Morgan was talking to City firm after City firm in meeting after meeting about the lack of diversity
Her first battle was to win the TSC chair. There used to be a cosy deal between the Government and the opposition whips to divvy up the chairs in some smoke-filled room. Now anyone wanting to lead a select committee has to get elected by their fellow MPs. Morgan was up against arch Brexiteer Jacob Rees-Mogg. Her clarion call during her campaign to lead the Committee could not have been more different from her opponent’s.
TweetAs someone who campaigned vigorously for the UK to remain in the EU, Morgan made clear that she would strike a very different tone. While Rees-Mogg intended to ask the financial regulators some hard questions about their approach towards the regulation of financial firms through Brexit, Morgan has an altogether different agenda. She has already launched an inquiry looking at the UK’s future economic relationship with the EU.
Her key question to the finance sector is what are the likely systemic and economic effects of the UK leaving the EU. And she also wants to get into the long-term relationship with the EU after we have left. Expect to see the City called in again and again on this subject. She is asking the right questions – hard on Government, regulators and firms all at once.
But as the first woman in the chair, Morgan has another signature agenda she wants to stamp right across her tenure. Before she entered the cabinet she was also City Minister. She was talking to City firm after City firm in meeting after meeting about the lack of diversity. So it’s no surprise she has now also launched an inquiry entitled ‘Women in Finance’.
Following the Government’s initiative, she has a passion to boost the number of women at all levels in the finance sector: from the boardroom to the high-street branch. And if any witness is going to be summoned in front of Morgan, you’d better have a good answer on diversity – on your current and your existing plans.
Morgan is set to continue to play a leading role centre stage holding finance and holding her Government to account. That’s a very good thing for everyone. Long may she reign.
