Prawn Cocktails and Cold Shoulders: Labour, the Conservatives and the City of London since the 1990s

Abstract

This article charts surprising departures in how the two major British parties have cultivated and regulated financial services since the 1990s. During this time, Labour leaderships have consistently sought to accommodate the City, while the Conservatives have defied it at important junctures. This pattern of behaviour challenges the assumption in classical business power theory that Conservatives should be more attuned to finance's preferences than Labour. The article attributes this to the parties’ distinct understandings of the interplay between the sector's business power and their own statecraft, which derive from substantially varying political links with the City. Labour's repeated charm offensives are prompted by a sensitivity to disinvestment and perpetually weak political ties. The Conservatives’ approach is less sensitive to the sector's economic weight and is underwritten by enduring political ties. The article examines these differences over time and with special reference to two episodes: post-financial crisis banking reforms and Brexit.