Levelling Up? Not when the NHS gets 1%, while the City’s 1% prosper

March 8, 2021  

Last week’s budget has caused controversy with its low payrise for nurses. But what gained less attention was loosened rules around stock market trading – intending to bring more unregulated investment to the City. It’s a paradox that raises damning questions for a Government apparently set on levelling up, writes Adam Lent.

It would be odd for a Government so committed to ‘levelling-up’ to simultaneously hold down pay for NHS workers while also making it easier for bankers to get rich off the back of risky investments. But that is exactly what happened last week.

The 1% rise for nurses and others working in healthcare has rapidly blown up into a major story. But the banking side of things was less noticed. In the Budget, the Chancellor indicated he was likely to loosen the rules around how companies are listed on the stock market. This reason for this is SPACs.

Special Purpose Acquisition Companies are the latest financial craze sweeping markets across the globe. Investors give a group of supposedly entrepreneurial whizz-kids a shedload of money to go and buy any business that takes their fancy, build it up, list it on a stock exchange and, in theory, make a shedload more money for everyone involved. That’s right: investors hand over millions for a project that has yet to be identified let alone analysed and understood.

How does it help levelling-up for the Government to enact one policy that will make very rich people even richer alongside another policy that will leave low-paid public sector workers with barely anything?

The market is now so heated that people well outside the world of finance are getting in on the act by partnering with or launching SPACS such as tennis champ Serena Williams and Cosmopolitan editor, Joanna Coles. As financial fads go, SPACs are up there with sub-prime mortgages as one of the things someone important should have realised was a really bad idea some point before everyone realised they were a really bad idea.

The problem for City types is that London has stricter rules on stock market listings than places like New York and Amsterdam. So, while SPAC fever grows exponentially Stateside and in the land that appropriately enough gave us Tulipmania, London is not getting much of the action. Hence, the Chancellor’s enthusiasm for a bout of deregulation in the City.

There is so much questionable about this juxtaposition of policies that it’s easiest to simply list the following questions. Maybe some enterprising MP might like to put them to Treasury ministers or No. 10.

How does it help levelling-up for the Government to enact one policy that will make very rich people even richer alongside another policy that will leave low-paid public sector workers with barely anything?

Given public sector pay has been held down for a decade due to the damage done to the public finances by the risky investments behind the 2008 Crash, why is the Government contributing to another potential financial bubble that, when it bursts, could once again damage public finances?

We are spiralling down towards a more unregulated and more unequal future – at the very time we need most desperately to lift each other up.  

Why is the Government launching a double economic whammy on the poorer parts of the country: encouraging yet more investment into London’s financial sector while simultaneously holding down pay in ‘left behind’ places that have a higher proportion of the workforce in the public sector than London?

And finally, doesn’t this just feel all wrong? Health and public sector workers have given so much over the last year while City fat cats have pretty much done bugger all except spend more time with their Pelotons.

It must feel deeply unjust – even to a Chancellor with a background in the heartless world of hedge funds – to punish the former and reward the latter.

If the Government is as serious about levelling up as they claim to be then answers to these questions are required pretty urgently.