Tory drive for City executive support

The Tories have delivered a stark reminder of how the political landscape has fundamentally changed in the last decade with the launch of a charm offensive to encourage City of London firms back to the Conservative cause.

Not so long ago, it was Labour that had to work hard with the City and, despite derision of its early efforts, eventually succeeded in calming fears about an incoming Labour government.

Now the reverse is true, with support for the Tories among one of its traditional heartlands at a low ebb. Howard Flight, Shadow Chief Secretary to the Treasury, recently publicly acknowledged as much by admitting: "The Conservative Party has, for a long time, failed to nurture its natural City supporters."

The response was the launch, just prior to Easter, of the City Circle of 500 executives from the financial sector. Mr Flight, new Tory leader, Michael Howard, and Shadow Chancellor, Oliver Letwin, have set out their objectives for a new relationship with the City. They want to recruit 1000 City executives who will have input into the formation of Conservative policy and intend to set up several special groups covering insurance, actuaries, banking, stock broking, accountancy, the law, shipping and investment banking.

The plan is for these policy sub-groups to start working before the summer and for the full membership to meet twice yearly, with the next event provisionally set for October.

The unspoken agenda, of course, is to raise money to help the debt-ridden Tories fight the next election. Conversely, Gordon Brown's ability to keep the City on side with the government's economic policy has helped to keep incoming donations healthy - despite major upheavals in the financial markets since 1997 and some hard-hitting tax changes.

However, the Tories believe that the threat of further tax rises - which, it is argued, are needed to sustain the recently announced increases in public spending - makes Labour more vulnerable in the City than at any other time in the last seven years. Based on the turnout at the launch of the City Circle of 500 executives, Mr Howard may be right.