Whitehall delegates offered a fair hearing

There are two sorts of Whitehall summits, according to one seasoned observer: those that are staged to provide good publicity for the politicians and those that are held to reach real decisions.

This week will see the latest attempt by the Treasury to persuade the banking industry to lend more to small businesses, with a summit bringing together banks and small business groups.

As with any summit involving the banks, this will be in the “politicians beat up the baddies” category – like last week’s dressing-down of the credit card companies by Lord Mandelson, business secretary, and earlier efforts to bludgeon mortgage lenders into providing more housing finance. Last week also saw two summits in the “tell us what we can do, and we’ll do it” category. Gordon Brown hosted a summit for the construction industry on Thursday while Lord Mandelson invited the car industry in to find out what needed to be done to revive its fortunes.

Both types of summits follow a set pattern: about 20 industry chiefs, trade association leaders and customer representatives are summoned. After an hour or two of round-table discussion, the host presents details of the statement to be issued to the media, usually negotiated in advance with the main interests, and promises a follow-up meeting in a month or two.

For example, the prime minister offered builders, mortgage lenders and housing associations breakfast at 10 Downing Street to talk about the crisis facing their industry. The executives were told to check in by 7.40am for a prompt 8am start and were plied with bacon butties, egg sandwiches and coffee.

“The basic rule is, don’t eat the sandwiches,” said one participant. “Have your breakfast before you get there.”

Another agreed ruefully: “It’s a very disappointing breakfast. It used to be coffee and croissants with Tony Blair.”

After a little networking, they were ushered into the Cabinet room, to sit at the famous oval table. In came the supporting ministers – Ian Pearson from the Treasury and Margaret Beckett, housing minister.

Mr Brown strode in two minutes later, greeted each participant personally and then kicked off the discussion by saying he was there to listen and look for ideas on how to tackle the unique situation the economy was in.

Each of those present had a chance to put forward their views, and even the villains of the piece, the mortgage provider, were given a fair hearing.

At 9am, the meeting was concluded with a promise to reconvene in the new year.

“There was a surprising degree of consensus,” said one participant.

“They realise the status quo is not an option,” said another.

It was rather more muscular the previous day, when the credit card industry was hauled into the conference centre at the business and enterprise department for a roasting by Lord Mandelson and Gareth Thomas, the consumer affairs minister.

The director-general of the Office of Fair Trading was there to provide extra clout in case attendees failed to realise the need to do ministers’ bidding. So were debt advice agency representatives and consumer groups. The 1pm meeting was due to end at 4pm but ran until 5.30pm. Mr Mandelson was there at the start but left Mr Thomas to continue the meeting – reappearing around tea-time.

Lord Mandelson had told the media he was ready to launch an OFT inquiry unless companies started treating people more fairly and cut interest rates. But the meeting itself was much more civilised than might have been implied by that warning, with no request to reduce credit card rates.

“It was really about embedding best practice and spreading it around the industry,” one participant said, adding that both sides were keen to hammer out some principles for dealing with consumer complaints.

Another frequent summit participant said the way the meeting had been portrayed to the media was typical of when the financial services sector was involved.

“We’re going into a recession, and they want us to lend more!” he said.

“It is the lenders who have to ensure they are lending to people who can repay the loans. The politicians report publicly what suits them publicly. In the discussions, however, we discuss privately what really matters.”

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.