Economics viewpoint Why Labour should be wary of reliance on City

There was a period of remorse and apology for banks and I think that period needs to be over." So said Bob Diamond, the eight-figure-earning Barclays chief executive, in 2011.

- Richard Partington

There was a period of remorse and apology for banks and I think that period needs to be over." So said Bob Diamond, the eight-figure-earning Barclays chief executive, in 2011. "We need our banks willing to take risks, to be confident and to work with the private sector in the UK to create jobs and improve economic growth."

With the wounds still fresh from the worst financial collapse in a century, there were howls of outrage and anger in UK political circles over the American's choice of words. Had he waited 14 years, the response in Westminster today would be a nod of agreement.

Keir Starmer's government has embraced the City, seeing the Square Mile as a ticket to faster economic growth. It is not natural territory for Labour - but with a faltering economy, a febrile bond market to keep onside, and tight constraints on tax and spending, needs must.

This month, Rachel Reeves could have been channelling Diamond in her Mansion House address. The clean-up job after the crash had gone "too far in seeking to eliminate risk", the chancellor said. Regulation was a "boot on the neck of business" that needed lifting.