No clubby City – but the FT’s role endures

Although the Financial Times is rightly celebrating the 125th anniversary of its foundation in 1888, the newspaper we know today is of more recent origin. It was created out of the merger of the two City of London news sheets, the Financial News and the Financial Times, at the end of the war in 1945, and the appointment as editor, four years later, of Gordon Newton, the true founder of the modern FT.

So it was still relatively early days when I joined the FT as a feature writer on leaving the Royal Navy in 1956. It was a different world then, and financial journalism was different, too. Newspapers had very few pages – newsprint rationing had only just ended – and no member of the FT editorial staff had his own byline (it was, of course, an all-male staff in those days). We were all either Financial Times Correspondent or Financial Times Reporter, except for the columnists who sailed under flags of convenience such as Lex and Lombard.

Newton had instituted a unique recruitment policy. Every other national newspaper insisted on journalists first serving a term on a provincial newspaper, to learn the trade. He recruited graduates straight from university, provided the university was either Oxford or Cambridge and provided they had either a first or a good second. Among my contemporaries were Andrew Shonfield, William Rees-Mogg, Michael Shanks, Samuel Brittan and Jock Bruce-Gardyne. Sir Samuel, happily, is still writing for the paper, well over half a century later; the others, sadly, are all now deceased.

The principal motive for this policy, I suspect, was that untrained journalists did not need to be members of the National Union of Journalists, so the FT could pay us below the NUJ minimum wage. But it seemed to work.

An even more important contributor to the FT’s success in those early days, and an even greater difference from today, was that it enjoyed virtually a monopoly on serious financial journalism. The Economist was there, commenting on politics and economics on a weekly basis, and the other daily and Sunday newspapers had their City editors. But the City editors’ raison d'être was share-tipping; and when I was the principal writer on Lex in 1960, my last job before leaving the paper – the column was still on the front page, in the top right-hand corner – the only other serious analysis of company accounts, new issues or takeover bids was in the better stockbrokers’ circulars. And the BBC (the only broadcaster then) engaged in no financial or economic coverage of any kind.

That initial de facto monopoly was particularly helpful since financial and economic journalism was to become a major growth area for newspapers and the area least menaced by the competition that was to come from television. The UK had emerged from the war triumphant but gravely weakened economically. As the nation staggered from one economic crisis to another, economic issues dominated political debate to a greater extent than ever before. At the same time, the City was, with mixed success, seeking to re-establish its historic position as an international financial centre.

When, many years later, I found myself in government, I took the view that the only way that London could remain a world-class player in the great growth area of financial services was through the reforms that came to be known as “big bang”. As a consequence, London changed from being a British financial centre to a truly international financial centre – as New York is not. I liked the clubby old City I first came to know well on the FT. The new City, where the acquisition of wealth too often counts for more than a good reputation, is a less attractive place. But I have no doubt that change was necessary in the national interest.

This is all the more so in the evolving international context. When I was on the FT, far too much of British business and industry felt secure in the warm embrace of what was still known as Imperial Preference, and was reluctant to look further afield. It took entry into the Common Market, as the EU was then known, to bring about a recognition of the opportunities on our own doorstep, as Europe recovered from the privations of war.

Today, I suspect that far too much of British business and industry similarly feels secure in the warm embrace of the European single market, and is failing to recognise that today’s great opportunities lie in the developing world, particularly in Asia. It may be that, just as entry into the Common Market provided a much needed change of focus, so departure from an EU that has triumphantly achieved its historic purpose – the elimination of the risk of a third great European war – and is now arguably past its sell-by date would bring about a similar salutary change.

It is, to repeat, a different world now. Since I was on the FT more than half a century ago, we have witnessed two great – and related – developments.

The first is the Darwinian triumph of capitalism over socialism, as seen in the collapse of the Soviet Union and its system, and the huge economic success of China when it decided to embrace a form of capitalism. That capitalism in practice is a flawed economic system has been demonstrated by the recent banking meltdown, from which we have still to recover. But it has proved to be far less flawed than any other system.

The second is the coming of globalisation, which among other things has lifted untold millions out of poverty (an achievement of which official development aid has proved wholly incapable). So it is a much better world. But it is also, inevitably, a tougher and more competitive world. In that world, the FT has a unique role to play as a fount of reliable information and informed comment.

The writer was a member of the FT editorial staff from 1956-60 and chancellor of exchequer from 1983-89