His job is to safeguard the City of London’s future and the UK’s finance industry. Who is Stuart Fraser?
Stuart Fraser is quite possibly the most important cog in London’s economy you’ve never heard of. His day-to-day duties include sweet-talking China and India’s governments and banks into allowing London a decent mouthful of their ever-expanding pie. He regularly cajoles Westminster and Brussels into diluting increasingly draconian banking regulation.
He decides how the City of London will look in 20 years’ time. He maintains more than 10,000 acres of London’s open space. Not infrequently, he hosts dinners for heads of state.
Stuart Fraser is the chairman of policy and resources at the City of London Corporation – jointly the most senior role within the corporation, working alongside the Lord Mayor. (The chairman serves five years to each Lord Mayor’s one.)
He is responsible for safeguarding the City of London’s future and international competitiveness, and those of the UK’s entire financial service industry.
Unbeknown to many Londoners, the City of London Corporation that Fraser joined in 1993 primarily supports the interests of businesses rather than residents, differentiating it from all other London councils.
The corporation also represents the UK’s entire financial services industry, which employs one in 47 people in the country and contributes 10 per cent to its total tax receipts – more than any other industry.
His day-to-day duties include sweet-talking China and India’s governments and banks into allowing London a decent mouthful of their ever-expanding pie
I’ve come to Guildhall to find out how Fraser keeps on top of all this, and how he plans to secure the City’s future as a world-leading financial hub.
Guildhall, it turns out, is a peculiar and rather wonderful place. I wait in an exceptionally shiny reception, all polished marble and glimmering 24-hour-news TV screens. Then Sanjay, the sharply suited press officer, arrives to guide me through doorways, up stairs, round corners, down corridors.
We pass 600-year-old crypts interspersed with the carpet smell and glassy flashes of new offices, coats of arms and ancient suits of armour propped up in hallways that lead to Eighties prefab-style rooms jammed with computers. The architectural smorgasbord is a fitting heart to the City.
Fraser has sacrificed his one hour of breathing space in a day bulging with back-to-back meetings with a range of politicos, international industry superstars and London governance bigwigs. Then tonight he’s hosting dinner for corporation members. It’s a fairly typical day.
It must be very demanding, I suggest, as the 65-year-old sits next to me in unremarkable executive uniform – white shirt, grey trousers, frameless glasses – legs and arms crossed.
Fraser flaps the suggestion away: “No, well, you know – I have a good team of 3,500. Today I have a bit of a gap, which is nice.”
He later skims over the fact that the work “dominates your life” and, understatedly, mentions he had to “speak to his other half” before committing to the job. That’s Laura, wife of 43 years, who has lived with him in Blackheath for 37 years.
Still, we can safely assume that Fraser is no stranger to hard graft. He’s always worked in the City since leaving school at 17, starting as a bluebutton (runner). Back then, he says, the City “still had a club atmosphere and was always a very quiet place to do business”.
He has “come to appreciate the City much more” over a career that has seen the London Stock Exchange housed in three different buildings. He’s traversed Forex, broking, equities, investment research and fund management, and is currently director at Brewin Dolphin Securities, the UK’s largest independent quoted stockbroker.
Fraser loves the City because it is still the hub of global trade and global business. “And, of course, it has fantastic history – a history that’s not just in the books, but in the buildings. It’s got character – it’s not just a lump of concrete somewhere.”
He is sensitive to the City’s heritage – he tells me there are nearly 600 listed buildings in the City of London, plus around 20 conservation areas – but is also pro expansion.
He launched the high-rise buildings policy in his former corporation role as chairman of planning, and works around the rules that keep about 90 per cent of the City low-rise. He believes that “buildings are to be used, flexed and, in my view, when business buildings outlive their use, you create something else”.
He thinks clever architecture that shows “respect” for old buildings is the answer to the City’s desperate need for space. (BNP Paribas predicts London will need the equivalent of four more Shards to accommodate an additional 11,500 financial services workers arriving in the next three years.)
“Buildings are to be used, flexed and, in my view, when business buildings outlive their use, you create something else”
“I think we’ve moved away from the old idea that you have to put a defensive area around an old building,” he adds. But Fraser is far more interested by what’s inside the building than how it looks.
“A building costs money to run. The only thing that earns money is the people inside that building, and that is the thing people forget sometimes. This whole empire of tall buildings would be a national liability if it wasn’t full of international talent.”
Go global for for the best people
Attracting international talent is the inner sanctum of Fraser’s beliefs about the City of London’s future. He thinks London’s greatest strength is its “openness”, and tells me that immigration law would be the one governmental policy he would change if he could.
“We need everybody of economic importance. It should be open for non-doms, either people who put their money in or put their talent in.” He “absolutely” thinks we should let more foreigners in to our education system.
He points out that “most people we deal with in future years will not be from Europe, but from China, India, all these different areas.
“Keeping the City open to everybody is of paramount importance in the long term, and we think about these things in 20, 30 years’ time. Openness is what created the City post Big Bang.” As it happens, one in three Londoners were born outside the UK.
He is proud of our colour-blind meritocracy. “The City is purely talent driven. It doesn’t matter where you come from – you’re welcome. That’s not the case in many other [financial]centres around the world.”
Yet the City cannot afford to become complacent about maintaining its international competitiveness. “Our major competitor continues to be New York, though they’re doing equally tough stuff [in terms of financial regulations].
“And there’s Asia. We’ve always got to look at the emerging centres that are very keen to take our talent, and the international talent.”
The Corporation’s Asian offices – in Mumbai, Shanghai and Beijing, among other major cities – work to build trade links between London and rising markets across the East. Meanwhile, more broadly, the corporation advises Asian financial institutions keen to learn from London’s economic success.
“The City is purely talent driven. It doesn’t matter where you come from – you’re welcome. That’s not the case in many other [financial]centres around the world.”
Is there not a conflict here, in back-scratching the financial centres the City competes with, increasingly fiercely, for global dominance?
Fraser thinks not. “Places like Shanghai are perfectly situated for the growth of the region. So first and foremost they will be financing the growth in Asia, but of course that [need for capital]will, eventually, travel across the world.”
He cites the example of India.
Despite being determined to finance colossal transport and infrastructure projects internally, the country was, ultimately, forced to use international capital.
“China may be a little way away from that, but in both these areas we know they’re going to be there as a valuable source of income for London. So, frankly, it’s better to help them on their way if you can.”
Fraser highlights the appetite of the Chinese sovereign wealth fund and banks to invest internationally. “And in Europe, they’re unlikely to choose Paris or Frankfurt rather than London.”
What about London’s financial stalwarts threatening to head East? Barclays and HSBC, for example? Fraser hesitates. “If someone said to me, ‘I want to move 10,000 desks’, there’s not very many places in the world you could take them. And, of course, London has many strengths.”
“Longer term, it would be damaging because people do gravitate to head office – that’s one of the reasons people come here.” He pauses again. “These are commercial decision the banks will have to make.”
Searching for allies
Then Fraser stops dancing around the damage that increasingly draconian regulation is inflicting on the City.
“There has been a fair amount of sabre rattling, mainly actually by the American investment banks, who are and remain very angry. Very angry. They say: ‘We’re here, we pay the taxes, we’ve never made a loss here, we’ve never borrowed and yet we pay all this levy and everything else and now were treated the way we are’.
“Now, right or wrong, it doesn’t matter, but that’s their attitude.” Is it particularly the levy that’s stinging them? “Well, the levy, but the marginal tax rate doesn’t help.” Again, it all comes back to London’s ability – or inability – to attract international talent.
“[Financial] people thinking of coming to London say: ‘Well, the tax is too high, and all I read in the papers is that I’m a crook’. It doesn’t go down well internationally.”
He also cautions on remuneration restrictions. “You might have a view on how much someone should be paid, but if that view is wrong in the global marketplace, you lose them.” He points out such interventions wouldn’t happen in football, a comparatively high-earning and global industry.
Fraser lobbies the government and Brussels (the corporation has an office there too) to try to loosen the noose of all these issues. “Obviously we try to find allies somewhere for it. That’s why I go to Frankfurt, to Berlin, to our office in France and Italy.
“But it is still a difficult one. We account for around 35 per cent of the European wholesale financial market, yet we have the same vote as Poland, which has 0.3 per cent. So it is difficult. But that’s a fact of life you know,” he says, laughing.
The merry band of MPs lining up to bash bankers in this country doesn’t exactly help. “Politicians certainly agree with the logic of what we do, but then they say, ‘when you’re out on the doorstop, I get it in the neck with people asking me what I’m doing with those bastard bankers’.”
It must be incredibly frustrating, dealing with people who, behind the scenes, agree with your economic logic, but then oppose everything you do in public. “Yup! But then they have to, they are elected by the people.”
Fraser isn’t exactly sympathetic to Westminster, though. Politicians’ handling of the recession has left him resentful. “They looked the other way when it suited them,” he argues, even though “the signs were all there” of the impending credit crisis.
“Of course when anything happens, you don’t want to get the blame, and if you had your own problems like the expenses [scandal], you’re not going to say, ‘Well, I was responsible too’.
“But we’re quite used to that.” He ends up smiling again, seeming unruffled despite the choking threat financial regulation poses to London’s – and the country’s – economy. He’s hardly had an easy ride in this job.
Earlier he told me, smiling again: “Before the crisis I would have wanted to leave the City in a better position than what it was before. Since the crisis, [my aim has]probably been to get it back to where it was.”
“And there will be another financial crisis. There always is. I just suspect it might be not here”
Fraser thinks “there might be a credit crunch coming if we’re not careful”. He is concerned about the availability of credit to consumers and businesses as a result of banks “husbanding resources”, particularly with increases to capital requirements.
“And there will be another financial crisis. There always is. I just suspect it might be not here,” he laughs, maybe awkwardly. “I think all of Asia is on a big learning curve, and that’s generally where mistakes will be made. What won’t stop is globalisation.”
But the City can hardly extract itself from the global financial situation with which it is so entwined. “Of course if there was a financial meltdown or something like that, it would affect everybody. But we’ve come through this crisis, I think, quite strongly.
“Our reputation has not been severely tested. We still have a reputation for upholding the English law.” Fraser believes our legal security is another of London’s key strengths. “There are still many places in the world that might have put the buildings up, but they haven’t done anything else.”
I ask if he is worried about London’s future. Fraser takes the longest pause in our interview before chuckling: “Well, if you weren’t you’d be complacent!”