Pass the port – Investment banks can live well in London outside the EU

I am one of the few MPs who foolishly will stand up for Investment bankers. I have no problem with them earning big money as long as they live by the market and financially suffer by the market if they get it wrong. I think paying them  bonuses in good times is a good idea, as long as these are removed in bad times, as that makes their businesses a bit more stable.  I don’t want any public subsidy or government guarantee. I do accept that at their best they do good work in financing projects and companies, in underpinning and helping create new jobs and activities.

I do find it odd that some of the foreign owned ones whine and whinge about the UK’s possible exit from the EU. The very essence of good corporate and investment banking is managing risk and change. They are usually ace at finding their way round rules without breaking any, outwitting lumbering governments and  bureaucracies, and avoiding tax legally. I don’t mind them piling in for Remain. As  they are so unpopular with many UK  voters I suspect their over the top dire  forecasts help the leave side and provide many with another reason to dislike them.

The new scholarship level question they wish Leave to answer is how will they manage without the passport system of access to the single market when we leave. There are four simple points to make.

The first is, why should we lose the passports? As Germany wishes to avoid a WTO 10% tariff on her cars she will see the reasonableness of  not altering arrangements that suit her in return for not altering arrangements that suit us. Why would the UK agree to ending the passports?

The second is even if they found a way of withdrawing the formal EU passport, under MIFID II any external country to the EU with equivalent financial regulations would be free to sell services and product in the EU. The UK will clearly qualify, as our regulations will be not merely equivalent but identical as most of them are now  based on EU law.

The third is the number of successful passported products is limited. The best example, used by the government, is UCITs investment funds. Practically all of these EU funds are domiciled in either Dublin or Luxembourg. So they will remain when we leave the EU. The UK will still be able to continue our contract work for these EU domiciled funds, which will  retain their passport status.

The fourth point is most of these grand Investment banks that complain have other subsidiaries around the EU in addition to their London office, so they will always have a brass plate address to qualify.

I have every confidence that these  bright and motivated people will flourish out of the EU in London. Some of the same people and their predecessors told us if we stayed out of the Euro they would all have to  move to Frankfurt or Paris. They didn’t and London did even  better by staying out of the single currency.

They may be bright and good at what they do,  but some of them do seem unable to grasp the simple realities of how the EU works and of modern politics.

 

(this item was requested by a reader)

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102 Comments

  1. Lifelogic
    Posted June 4, 2016 at 5:11 am | Permalink

    Indeed they will be fine outside the EU. They can and often do set up subsidiaries in other countries as & when needed. Or they can do things in partnership with local companies if governments get in the way as government tend to.

    I do however think that executive pay is rather out of control and shareholders need more powers to ensure that directors do not, in effect, steal the wealth of their shareholders (or indeed their retired pensioners). This often while running companies into the ground. We have seen this particularly in the banking and finance areas over the last 10 years or so.

    • Lifelogic
      Posted June 4, 2016 at 5:30 am | Permalink

      Much drivel on lack of equality in university pay for female professors is being reported endlessly on the BBC. There is however a huge gender bias in academia between predominantly male subjects physics, science, computer science which tend to be rather higher paid (due to supply and demand) and predominantly female ones on the arts, social sciences and languages side that is rarely taken into account properly.

      They are simply not comparing like with like. Rather a basic error for supposedly clever people. Perhaps more women need to study further maths, physics, hard sciences and computing to get their pay up. But most seem to choose not to, as is very clear from the A level choices they make. The BBC never seem to address this issue at all for some reason.

      • a-tracy
        Posted June 4, 2016 at 10:48 am | Permalink

        I don’t often agree with your gender arguments, but what does go wrong, at High School my children’s top Maths teachers were female right up to A level and the Head of Maths was female, my daughter chose to take Maths with her art subjects. My son did a master of maths and said only 10% of the students were female and thus on a small % of professors were female.

        How does higher education pay get calculated, is it based on average job salaries for those subjects after graduation. Perhaps this should be explained to girls st 13.

  2. CHRISTOPHER HOUSTON
    Posted June 4, 2016 at 5:17 am | Permalink

    Off Topic:
    Rt. Hon Michael Gove did very well indeed in the Sky interview last night.
    Re-watching on the internet, not sure why 5 minutes in, Mr Trump was mentioned twice by Faisal Islam

    • CHRISTOPHER HOUSTON
      Posted June 4, 2016 at 5:23 am | Permalink

      And twice again 7 minutes in “Oxford-Trump and “Trump-politics”. Odd

    • Richard1
      Posted June 4, 2016 at 7:21 am | Permalink

      I haven’t seen Faisal Islam interview before, I thought he was dreadful. Gove couldn’t speak for more than a couple of seconds before Islam interrupted him with some spurious clevel clogs remark. These celebrity TV types need to appreciate that the audience are interested in the arguments of the interviewee not in puffing up the importance of the interviewer.

      • Know-dice
        Posted June 4, 2016 at 10:35 am | Permalink

        +1

        Most unprofessional interview I have ever watched.

        Michael Gove did very well, I don’t think I would have remained as calm under those circumstances….

      • Lifelogic
        Posted June 4, 2016 at 12:12 pm | Permalink

        Indeed they are tiresome. The need to interrupt when politicians just fail to address the questions but Gove was answering them all directly.

      • Mitchel
        Posted June 4, 2016 at 12:33 pm | Permalink

        I totally agree.Grove was being questioned about half-finished sentences-half-finished because he was constantly being interrupted.Quite appalling technique by the interviewer.

        I didn’t think much of the range of questions offered up for Mr Gove either.

      • zorro
        Posted June 4, 2016 at 12:53 pm | Permalink

        Indeed, instantly unlikeable, and smug.

        zorro

        • Edward2
          Posted June 4, 2016 at 5:25 pm | Permalink

          I had to turn it off.
          How Mr Gove kept his temper I do not know.
          Faisal was more of a heckler than an interviewer.

      • Jagman84
        Posted June 4, 2016 at 8:21 pm | Permalink

        They attempt to make the news, not simply report on it. In this way they breach their position of neutrality. Ambition always gets the better of them.

    • Lifelogic
      Posted June 4, 2016 at 7:37 am | Permalink

      Why was Trump mentioned? Because Faisal Islam is clearly hugely biased for remain. As are nearly all BBC and ex BBC staff. Also he clearly lacked any sensible arguments to put or was just unable to think of any.

      One might have expected better from a Trinity College, Cambridge Economist. Then again Cambridge has produced rather a lot of dire economist over the years. People who have inflicted a lot of lefty, big government, magic money tree, claptrap and massive economic damage around the World.

      What were his views on the merits of the ERM and EURO structures I wonder. I have not checked but I suspect I know.

      • graham1946
        Posted June 4, 2016 at 9:47 am | Permalink

        I doubt he had serious views on the ERM as he wold have been 2 at the time of introduction and 13 when we joined. He is a Sky reporter, so BBC bias does not come into it.

        Economics id not a science it is a religion.

      • Jerry
        Posted June 4, 2016 at 10:00 am | Permalink

        @LL; I think you will find that employees at Sky News work to Sky News editorial guidelines, not those of the BBC…

        Please stop showing up your own bias, never mind ignorance!

        • Lifelogic
          Posted June 4, 2016 at 1:44 pm | Permalink

          I did not say he was bbc, just that bbc staff were almost all pro remain. Why do you not read what I actually wrote rather than taking issue with something I did not?

          He does perhaps have some excuse for his poor performance if he is that young. But why do sky not find someone rather competent and balancedl?

          • Jerry
            Posted June 4, 2016 at 2:49 pm | Permalink

            @LL: Then you must agree that Sky News is/can be just as biased as you keep claiming the BBC are, so stop implying that only the BBC are biased.

          • graham1946
            Posted June 4, 2016 at 6:25 pm | Permalink

            LL, Sorry to upset you. Perhaps you should separate your paragraphs if you mean something different. The first paragraph had as the he subject, Faisal Islam. Then you run on about BBC bias.
            You have such a constant bias yourself against the BBC – almost every post mentions it so you must forgive us if you are misunderstood.
            I too am annoyed at the BBC bias and make complaints, but they never take any notice. If you ever listen to the Points of View type programme on Radio 4, (can’t remember what it is called for now) I have never yet heard a BBC employee uphold a listener’s complaint.They are never wrong. Mostly the producers and directors are 20 somethings seemingly.
            Faiasal Islam is not that young, 39, actually, so more than mature enough to interview Michael Gove, only 10 years his senior. The quality of the interview is another thing, but age is not the reason. Bias probably is. Sky bias, I’d say. I think you forget that the ERM deblcle was nearly 25 years ago. Maybe a sign of age, as like myself, still thinking I am about 30?

          • miami.mode
            Posted June 4, 2016 at 6:54 pm | Permalink

            LL & Jerry. He came from Channel 4 News which in some people’s eyes is more biased than the BBC.

          • Lifelogic
            Posted June 5, 2016 at 1:01 pm | Permalink

            @Graham1946

            Indeed I usually agree with all the people complaining, then the relevant BBC producer comes on and basically say he/she says we were exactly right and all these listeners were totally wrong! Accountable to no one, but you have to pay for it anyway mate.

      • Dennis
        Posted June 4, 2016 at 12:11 pm | Permalink

        Yes Faisal Islam performed very badly. As he was swamped by Cameron into silence most of the time I suppose he thought to be more aggressive with Gove to make up for it but Gove did pretty well especially compared with the nonsense from Cameron.

        Again the trivial point about the £350 million is always brought up.

        Re economists – this Wednesday I attended a good EU debate by both sides which included an economist with a Masters Degree in economics (on the leave side). However afterwards I asked him a question which should be discussed in the very first lesson in economics – ‘what is the fundamental/primary source of economic wealth?’ He answered ‘intelligence’. So it appears he thinks that there is nothing materially preexisting needed for intelligence to work on.

        The lack of this knowledge by all economists I have talked to leads to the continuing destruction of the environment/biosphere/resources etc.

        • graham1946
          Posted June 4, 2016 at 6:38 pm | Permalink

          Dennis,
          Forgive me for picking holes, but I think you are mistaken in your second paragraph.

          The point about the 350 million is not trivial, it is basic to Leave’s case, so much so that it is sign-written on the bus. I believe that this is a big mistake and invites ridicule and trying to defend it by the clever use of words is counter productive. The public don’t care, they just see something is wrong. It needs painting out and the correct figure being shown – it is still large enough and they may gain some kudos for admitting a mistake. It’s Leave’s own fault if they go into the referendum looking as shifty as the Remain side do as a result of this folly. Perception is everything, and carrying on with what looks like an untruth (even if it is not) is unwise.

          • Lifelogic
            Posted June 5, 2016 at 1:03 pm | Permalink

            It is fine to make that claim, it is the gross figure as they freely admit. Far more honest than the bogus £4300 drivel.

      • hefner
        Posted June 4, 2016 at 1:11 pm | Permalink

        Fortunately for the world and all of us on this blog, Cambridge has produced you.

    • Anonymous
      Posted June 4, 2016 at 5:47 pm | Permalink

      Mr Islam did a good job. Mr Gove was excellent !

  3. Lifelogic
    Posted June 4, 2016 at 5:19 am | Permalink

    I see the BBC bias is being stepped up further. Proven wrong on every issue (but perhaps civil liberties) and hugely politically unpopular Nick Clegg suggested that Boris Johnson is Trump with a thesaurus. So the BBC decided to use this as an excuse to try to trash Boris in a photo montage at the close of Newsnight.

    Faisal Islam suggestion, to Michael Gove, that he was an Oxbridge Trump was equally pathetic & unacceptable. But Gove dealt with it very well and had the better of the rather childish interviewer.

    • Iain Moore
      Posted June 4, 2016 at 7:38 am | Permalink

      I saw that too and could not see any reason for it, for the same photo montage could have been put together for any politician, that the BBC chose to do it exposed the BBC’s political bias.

      • Lifelogic
        Posted June 4, 2016 at 8:51 am | Permalink

        The reason is that remain are getting rather desperate, the BBC is hugely biased on the issue and, just like Clegg, lacking sound arguments they just want to trash Boris by implying he is the same as Trump. He is nothing like him at all.

      • graham1946
        Posted June 4, 2016 at 9:51 am | Permalink

        How did you manage to seei t on BBC? It was on Sky.

        • Peter Davies
          Posted June 5, 2016 at 6:43 am | Permalink

          I think u will find he is referring to news night a couple of days ago which ended with pathetic dual photos of Boris and trump, unbelievable!

  4. CHRISTOPHER HOUSTON
    Posted June 4, 2016 at 5:32 am | Permalink

    And again once 12 minutes in “You’ve imported this Trump campaign..”

  5. oldtimer
    Posted June 4, 2016 at 5:48 am | Permalink

    Agreed.

    Last night I watched the Sky encounter between Mr Gove and its political editor, Mr Faisal Islam, when the latter made much of the serried ranks of economists, financial institutions and investment banks predicting doom and gloom for the UK if we vote Leave. From the later audience questions it would appear that Project Fear still had traction with many of them. Somehow the Leave campaign needs to develop an effective counter argument that depends on more than hope and faith if it is to change their minds.

    It seems to me that the first point to make is that economists “predictions” are not predictions but forecasts based on assumptions. It needs to be pointed out that those assumptions, in so far as they are stated, will be wrong. They will also omit many events, developments and trends in society that those same economists will not even have thought of. This is easily demonstrated.

    Think back to the year 2000. At the time everyone was obsessed with the millenium bug, to the extent it caused a global scare that, come midnight at the passing on one century and the start of another, planes might fall out of the sky and banking operations would turn turtle. Who then predicted what has happened in the next 15 years? Such as the the Isil reign of terror, the civil war in Syria, Russia’ occupation of the Crimea? Who then predicted the global banking crash of 2008 and its fall out? Who then predicted the rise of social media like Facebook and Twitter with fundamental changes in societal behaviour? Who then predicted the economic impact of technological changes like the mobile phone, digital photography or horizontal fracking (which has happened to turn the USA from being a net importer of oil and gas into a net exporter with profound geo political consequences)? None of those banks and economists did. Such changes were unforecastable. Yet they have had profound effects on the world and the UK economies.

    Looking ahead none of them can know what challenges and opportunities will emerge. What matters will be the ability the UK will have to respond to those challenges and opportunities. That will be far greater if we Leave the EU than if we Remain. It is no accident that EU growth is slower than in the rest of the world. The single market is a protectionist customs union. It is slow moving because it moves at the pace of the slowest camel – the reason it finds it so difficult to conclude free trade agreements. The EU’s institutional framework is closed, lacks democratic consent and is vulnerable to lobbying by corporate interest groups, both business and non business. It is based on the false belief that one size fits all. These characteristics slow its ability to adapt to changing times and circumstances. Somehow, I believe, the Leave campaign needs to undermine the appeal to the authority of the “experts” and to make the case for the UK to regain its freedom of choice and of action to respond to the uncertain, unknown world that lies ahead.

    • Iain Moore
      Posted June 4, 2016 at 7:51 am | Permalink

      The Brexit campaign needs to point out that they are not offering a manifesto for Government , what they are offering is what they believe is the best system of Governance that will give future Governments the tools to enable our country to succeed.

      Here they need to point out that being shackled to a sclerotic EU is damaging our prospects, and in order to meet an uncertain future we need Governments that are responsive and flexible to meet the challenges ahead, not chained to the EU that is locked into the past by the treaties that created it, that are beyond the ability of anybody to change them , as Cameron so aptly showed in his ‘renegotiation’.

      • Jerry
        Posted June 4, 2016 at 10:16 am | Permalink

        @Ian Moore; “The Brexit campaign needs to point out that they are not offering a manifesto for Government”

        Nonsense, of course they are, they want the UK to adopt different policies in certain areas, that is a manifesto for (an alternate) Government just as much as Labour wishing to have their policies adopted!

        On the other hand it could be argued that it is the Remain campaign who are the ones not offering an alternate manifesto for the governance of the UK, if they win then the same manifesto polices that won the last election will carry on.

      • miami.mode
        Posted June 4, 2016 at 10:39 am | Permalink

        IM. Agree that the Brexit campaign does not have to provide a manifesto for government as it is purely a method of giving the government of the day, be it Conservative, Labour or any other, a freedom to act with sovereignty and thus independence.

        Would suspect that many of the detractors such as BoE, IMF, CBI, world leaders, and indeed our own Chancellor, etc etc tell us to remain, as due to their dire predictions it is plain that they are worried they will have a lot of work to do dealing with wars and world depression!

      • Dennis
        Posted June 4, 2016 at 12:27 pm | Permalink

        oldtimer – that is an excellent post.

        There are many excellent points on JR’s blog that it is a pity that those grilled by the media do not take advantage of reading them to improve their performance. Doesn’t JR contact them with advice or would that be presumptuous but it is sorely needed IMO.

  6. Tony Hart
    Posted June 4, 2016 at 6:37 am | Permalink

    The UK had a £60 bn trading deficit with EU in 1915 and a £28bn deficit in the first quarter of 1916. There is no way that EU will stop our free trading with them; they are making £bns from us!! Norway, though, has a trading surplus with EU. So Norway has to agree with paying in an EU fee and accept free labour movement. I suspect that Switzerland also has a trading surplus (it definitely has a financial services surplus).

    • Jerry
      Posted June 4, 2016 at 10:45 am | Permalink

      @Tony Hart; Obvious typos aside… Your comment seems to be based upon the assumption that the EU (industries within) do not have alternate markets in which they can sell they goods and services, nor that the UK its self would not have alternate markets to buy from – but if you are correct then you are actually making the same case against Brexit as the Stronger In campaign are – that the UK simply should not take such a risk!

      • Edward2
        Posted June 4, 2016 at 5:30 pm | Permalink

        I’m confused Jerry are you for Leave or not.
        Or do you just enjoy taking the opposite view to posts on here for the fun of it.
        Be nice to see a post of yours instead of endless posts carping at others views.

        • Jerry
          Posted June 4, 2016 at 9:49 pm | Permalink

          @Edward2; I’m for Vote Leave, Brexit to mean exit, whilst accepting that Brexit will not be a quick fix to all our ills, as many of them have been home grown over the last 50 odd years and nothing what so ever to do with being a member of the the EU, Brexit is a medicine, not a magic cure, and just like some of the best treatments, sometimes it turns out to be less than palatable.

          I’ve said elsewhere and before, if all Brexit is going to mean is swapping from being halfway out of the room to being half way in the room (by way of the EEA/EFTA or being over reliant as a nation on buying from the EU) then I can’t see much point in leaving, at least on economic grounds, even more so if we are not going to fix our broken manufacturing economy.

          Also Brexit kills TTIP for the UK, I would hope, although I suspect that with opposition to it in Germany rising it is dead in the water anyway.

          • Edward2
            Posted June 5, 2016 at 9:13 am | Permalink

            I’m still confused,
            para one =out
            para 2= in

          • Jerry
            Posted June 5, 2016 at 11:07 am | Permalink

            @Edward2; That comment says far more about your ability to comprehend plain English than it does my voting intentions!

            Or were you just after another of your stupid arguments and never mind the facts, etc ed.

    • graham1946
      Posted June 4, 2016 at 6:53 pm | Permalink

      Tony.

      Exactly, so why should we be expected to pay a fee to allow them to make a profit from us? It just does not make any sense. If we were making the profit it might have some merit. The reason of course is that we are one of the few willing and able to make the contribution to the EU and they are all terrified that if we leave they will have a 9 billion hole in their finances. I can’t see Germany stumping up that amount. The whole thing could collapse if they don’t, or if we don’t agree to keep paying even if we are no longer members. Wouldn’t put it past our politicians. They think we are mugs and owe the world a living..

  7. agricola
    Posted June 4, 2016 at 6:43 am | Permalink

    I know nothing about merchant banking so am quite happy to accept your explanation of their future outside the EU.

    I watched the Sky confrontation between Faisal Islam and Michael Gove last night. I thought Michael performed rather well beneath and around the Islam ranting. Are the modern day political interviewers so full of themselves that they feel the need to shout down the interviewee to the point where the whole process becomes unintelligible. It would seem to be a way of hiding the fact that the interviewer does not wish to be heard.

    Noises off with Adam Boulton only served to emphasise his left wing connections. He managed to find the only three members of the audience who had doubts about leave. Doubts that have been part of their DNA irrespective of logic.

    Michael fought back valiantly and carried most of the audience with him, emphasising the sense in his argument

  8. CHRISTOPHER HOUSTON
    Posted June 4, 2016 at 6:52 am | Permalink

    I do not give two hoots about the worries, concerns, opinions, warnings, happinesses and otherwise of foreign companies in the Referendum period of the British people.

    The beauty of the internet and having multi-TV channels is that one can see foreign news in exactly the same way as natives of those countries see it. Sometimes in LIVE broadcasts, sometimes recorded in videos. BUT…I have never seen or heard…at a democratic decision making period, a foreigner to their shores in whatever capacity having the gross impoliteness, the temerity, the plain simple bad manners to publicly offer an opinion. If asked before the wheels of campaigns are set in motion, very diplomatically he may offer a preference but not in an absolutely dismissive way of the alternative. This is not called democratic protocols. It is common human decency and respect.

    So, CNBC in the last few days said that So-and-so ( An American, domiciled in America, with his company headquarters in America ) was “obviously”…. “on the plane to the UK” ” to warn them off voting for BREXIT ”

    It is a shame each one of us cannot vote a million times each for BREXIT. This is OUR country.

    As to the technicalities of whether Investment Banks of America and other American institutions should have any input at all here I recall the TV interview which Labour’s Ex-Chancellor Alistair Darling made: he spoke of his fury…genuine anger when he gathered together bankers and particularly American Investment Houses..he named one which people will recognise…and he asked them to conduct their affairs in a more transparent and orderly way in light of the banking crisis and… the snarling contemptuous reply was: “Why the hell SHOULD we????”
    He added they had the cheek to threaten to take their businesses out of the UK if they received any honest regulation.

    American companies according to American news have been using us “piggy-backing” , on UK companies as a means of gaining access to Europe because “Europeans are anti-American” and place difficulties in their way.

    The sooner Mr Trump deals with corporate America the better. I know it his intention so to do. He is a true and good American unlike the fools of some of the US companies which he has named in his rallies.

  9. Ian Wragg
    Posted June 4, 2016 at 6:58 am | Permalink

    As you say most people find these odious organisations
    repulsive. Goldman Sucks are financing the Remainiacs so this should encourage more Leave voters
    I see the capitulation of the LSE to Teutonic control is fully supported by the financial ignoramus Gideon

    Lets hope that the regulators block it although I doubt it as it is in Merkels favour

    • Lifelogic
      Posted June 4, 2016 at 7:17 am | Permalink

      It is almost as important to get rid of “Gideon”, as you put it, as it is to escape the death embrace of the parasitic EU. The man is clearly totally unsuitable to be Chancellor with his agenda of every higher taxes, ever more complex taxes, wage controls by government dictat, expensive greencrap energy subsidies, ever more endless waste (almost everywhere you look), his IHT ratting, his pension & landlord mugging and his open door to low paid (& thus large net liability) migration.

      The best that can be said of the man is that he is not quite as bad as Mc Donnell & Corbyn would be – with their dangerous “lets follow Venezuela” agenda.

      • hefner
        Posted June 4, 2016 at 1:17 pm | Permalink

        Re: IHT ratting: 30% of UK people will leave any sort of inheritance, and those who do will average just £191k, well below the £325k for single/£750k for a couple.
        For the majority of people reaching retirement age, the concern is not being caught by IHT, but more likely to see whether they will have enough to survive retirement.
        If despite access to wealth advisors, you have not been able to sort out your affairs, allow me not to be deeply aggrieved.

        • Lifelogic
          Posted June 4, 2016 at 8:42 pm | Permalink

          True, but why should you have to dispose of assets 7 years before death and sell your home. Few people know when they are going to die that much in advance, nor how much they may need to see them through before then.

          It is an outrageous tax of 40% on money that has already been tax perhaps at perhaps 40-45%.

          • Lifelogic
            Posted June 4, 2016 at 8:45 pm | Permalink

            Osborne made the promise year ago, ratted on it and even has the bare faces cheek to lie that he is delivering on it.

            How stupid does he think the public are?

  10. Elsey
    Posted June 4, 2016 at 7:10 am | Permalink

    My major concern with negotiating or extending existing trade agreements is the appallingly bad record of the UK government in the past 40 years. It’s hard to think of any negotiation they haven’t caved in on, botched or just completely surrendered. They lack any kind of experience in real world business negotiation and so appear completely incapable of standing their ground let alone simply walking away- which is what you have to do sometimes. Without question we should leave but if we do we need some capable, confident leadership which has been sadly lacking for decades.

    • Peter Davies
      Posted June 5, 2016 at 6:45 am | Permalink

      Probably a lot to do with the calibre of our civil service

  11. Richard1
    Posted June 4, 2016 at 7:41 am | Permalink

    I think we need a proper answer from Leave on immigration. There is widespread public support for stringent immigration controls but that doesn’t make it good policy. We have nearly 200,000 non-EU immigrants p.a. which have nothing to do with the EU. How many of these don’t we want and why arnt we already using our sovereignty to stop them if they are such a bad thing? Mr Farage says we should reduce immigration to a post-war level of 30,000 – surely a catastrophic policy in today’s globalised world.

    The Conservative manifesto pledge to reduce immigration to the 10s of thousand was exceptionally foolish as well as dishonest. Those who believe free markets lead to prosperity and peace want to see a liberal immigration policy. It’s a pity the UKIP tendency seem to be in the ascendant on the Leave side now.

    • Anonymous
      Posted June 4, 2016 at 4:09 pm | Permalink

      Richard 1 – Like many you argue the case for huge mass immigration but don’t offer any proof that it is needed.

      The ANZAC nations are very stringent and seem to be doing rather well. Most other countries operate strict border controls and still have access to labour and markets and have not had to give up their sovereignty.

      There is globalisation – and then there is the EU, which runs amok through member nations and magnifies it times ten.

      Yes. The 1% that run this country like mass immigration, that’s why we have it. This goes against the clear will of the people and is regardless of the EU. But the first warning shot sent to the 1% signalling that we’ve had enough would be a win for Leave. This being just the start.

      • Richard1
        Posted June 5, 2016 at 8:24 am | Permalink

        Australia has much higher immigration per capita than us.

        • Anonymous
          Posted June 5, 2016 at 9:57 am | Permalink

          Richard 1 – But it is immigration that they want and it is immigration that they can stop at any time they want.

          We do not decide much of it. Other countries decide for us instead.

          Also it is immigration per square mile and per house, per service, per infrastructure which counts – not per capita.

        • anon
          Posted June 5, 2016 at 8:49 pm | Permalink

          I would imagine most bringing a skill and probably capital with them.

          Less likely to be in a position of needing to claim.

          It is also their right to set the conditions they see fit for their country right or wrong.

          We do not have that power, it was taken from us against the clear public will.

          Our political system no longer faithfully represents the people. That’s why Out is imperative.

    • Denis Cooper
      Posted June 4, 2016 at 6:29 pm | Permalink

      “There is widespread public support for stringent immigration controls but that doesn’t make it good policy.”

      It doesn’t, but the public believe it is and maybe the government should try listening to the public for a change. If it turned out to be a bad policy it could easily be reversed, while the consequences of the government’s policy of allowing and encouraging mass immigration cannot be reversed.

      • Anonymous
        Posted June 4, 2016 at 7:46 pm | Permalink

        For once (the very first time) I disagree with you, Denis.

        There is no excuse for not having a pointed immigration system, for the benefit of this country first and foremost.

        Recruiting foreign plumbers must not mean having to take unlimited numbers of unskilled people – especially if they have not jobs arranged in advanced.

  12. Lifelogic
    Posted June 4, 2016 at 7:57 am | Permalink

    I see that Cameron in his Sky interview helpfully informed us that “the EU does not cease to exist if we leave” and “the Channel does not get any wider if we leave”.

    What a clever man he must be to have spotted these things. Could he not have found some real reasons for staying in rather than using these pointless statements to fill the time?

    Politicians like Cameron seem almost exclusively to say things that can be put into two groups. Things that are so obviously true that they were not worth saying at all and things that are clearly untrue.

    As examples of the latter are “remain in a reformed EU” or “no if no buts to the tens of thousands”, or “I am at heart a low tax Conservative” and his fake & worthless “renegotiation”

  13. DaveM
    Posted June 4, 2016 at 8:02 am | Permalink

    OT.

    Mr R, firstly, one of the main straplines of the Leave campaign is taking back control of our borders, and secondly there is criticism that both sides are lacking detail regarding their plans post-referendum. To that end, how about getting someone to produce a plan for a credible Border Force, perhaps using former policemen and forces personnel?

    Emphasis would need to be on:

    1. The fact that some of the much-vaunted £350m would be used to fund it
    2. They would have genuine powers to send illegals back to either their home countries or the safe country they came from. Powers which are inhibited under EU rules.

    • DaveM
      Posted June 4, 2016 at 9:32 am | Permalink

      Ps. What’s happened to the Albanians who arrived last weekend? They should have been put straight on a plane to Albania. If they’re still here the floodgates will truly open, thanks to the weakness of our politicians.

    • Jerry
      Posted June 4, 2016 at 11:10 am | Permalink

      @DaveM; Sorry but you are joking! A credible border force, with how many miles of shore line, have you not seen the news in the last couple of weeks (illegal migrants entering via a sailing yacht harbour, illegal migrants trying to enter via an inflatable off Kent, with other cases suggested having taken place already), let’s face it, if we could not fully secure our coast line during the second world war -complete with barbed-wire and mines- what makes you think we can today?

      I’m not suggesting that we accept defeat, I’m calling for politicos to have some realism, do not promise what they know can never be delivered!

      We don’t need another government Agency, just a better police force, one that tackles the real issues and not just those ‘crimes’ that have become a cash-cow for them, government or victims charities etc.

      • alan jutson
        Posted June 4, 2016 at 1:59 pm | Permalink

        Jerry

        Agree with your points, it is down to UK politicians to resolve.

        Recent Channel activity not helped (it is reported) by Mrs May cancelling the contract for 24 hour cover provided by 6 fixed wing aircraft back in January.

        Once again a politician knowing the cost of everything but the value of nothing.

        Perhaps we could station our new aircraft carrier in the middle of the channel/north sea and run helicopters from them.
        Trouble is the first one is not serviceable until 2 years time.

        Also see Dave Scrapped the Nimrods and insisted we cut them up rather than mothballing them, another excellent decision at the time it would seem.

        Coast guard stations also closed recently, so we are eyes blind as well.

      • DaveM
        Posted June 4, 2016 at 2:22 pm | Permalink

        We didn’t have helicopters in the Second World War and the radar was considerably less efficient. It wouldnt be hard to do.

        But practicalities aside, the real problem is that the govt lacks the power – or more likely the political will and backbone – to deport those who have already broken in.

        • zorro
          Posted June 4, 2016 at 5:38 pm | Permalink

          Indeed, political will is what is lacking.

          The border could easily be surveilled by air, plane or radar/electronic monitoring. A surveillance monitoring system (SIVE) was set up in the Canary Islands by the Spanish government to deter arrivals when they started arriving there by boat several years back, and that was successful.

          I fear that this government really isn’t that interested in trying to put anything similar in place to guard the coastline.

          zorro

        • Jerry
          Posted June 4, 2016 at 6:44 pm | Permalink

          @DaveM; Helicopters can’t fly 24/7, not in the quantity and quality you seem to wish, nor is inshore radar as affective as it would need to be I suspect, and even if both were up to the job what do you expect the coastguard/border forces do, stop every boat within 3 miles of shore. Do you realise just how many totally innocent small pleasure and working boats that would entail, any one of then though could of course be smuggling, but the vast majority would be found clean, and whilst the coastguard/boarder force are checking out one boat/craft there is a greater chance that another one that should have been stopped will slip through. One of the disadvantages of being an island I guess.

          I agree with your comment regarding human rights and the ability to deport, although even then forces are at work that have little or nothing to do with our EU membership (or even the ECHR) directly but everything to do with how the UK legal profession can make lots of money by spinning out the process – I suppose we could always remove most of the checks and balances that do stop people who should not be deported from being so, as unfortunate it will be for those who really are being wrongly deported – perhaps into harms way.

      • Anonymous
        Posted June 4, 2016 at 4:12 pm | Permalink

        Jerry – When the illegal migrants are captured – what happens to them ?

        • Jerry
          Posted June 4, 2016 at 9:59 pm | Permalink

          @Anonymous; I would hope that they get deported. But what does that have to do with the points I was making?

          • Anonymous
            Posted June 5, 2016 at 7:35 am | Permalink

            They will not get deported – meaning that the politicos don’t want to protect our borders.

          • Jerry
            Posted June 5, 2016 at 11:14 am | Permalink

            @Anonymous; You really do need to stop reading the Daily Maul, Daily Espresso and those UKIP handouts!

          • Edward2
            Posted June 5, 2016 at 8:24 pm | Permalink

            Cliché comment
            Observer Guardian Mirror and Labour Party handouts are just as biased
            Take your choice Jerry

  14. stred
    Posted June 4, 2016 at 8:20 am | Permalink

    (2 named banks) and the other international big boys have all invested in businesses that depends on EU policies such as mass movement of labour and renewable energy. They state so openly and their ex- directors included (influential figures in international organisations and central banks who tell us to stay in the EU).

    This week the European Investment Bank is lending £525m to the foreign consortium building a huge 86 turbine wind farm 14 miles of Caithness. It will eventually cost £2.7bnand the turbines last between 15 and 20 years. Huge ships have to maintain them and the cost will be many times existing electricity. The Scots already have so much wind that they have to export it to England when the wind blows and pay turbine owners not to generate. Who will pay – the consumer of course- not the bankers.

    They depend on the British public not realising their intentions and hope to frighten the feeble minded or those already working in the subsidy milking industries. Even the oil companies are now piling in and their employees will be urged to stay.

    Brexit the Movie will not be shown on the main TV stations and it may be an idea to pay the RT channel to show it. They must be cheaper to advertise on and they have some dreadful American shows on just before the British news, which has better presenters. As Russian energy has no interest in the EU green policy and they show documentaries it may be an idea to ask them to show it. The channel is popular with lefty under 30s who are likely to vote to stay, as they do not understand what is going on.

  15. alan jutson
    Posted June 4, 2016 at 8:21 am | Permalink

    All way above my pay scale John, but I trust your comments as an MP above many others because of your very significant first hand experience in this form of business.

    Do not know the details but I thought HSBC only a few months ago had decided to stay headquartered in London after searching abroad and making various threats scares

  16. Liz
    Posted June 4, 2016 at 8:23 am | Permalink

    I think many people,not just socialists, do have a problem with the excessive bank and corporate pay. (individual e.g. left out ed) People will only take so much greed before they revolt, as the Russian and French revolutions showed us in the past – these top people are the modern equivalents of their aristocracy who lived a life of extravagance far removed from the lives of the common man they employed whose pay is held down. Even in America Donald Trump is showing that many people are getting very tired of excessive pay for often poor results.

  17. alan jutson
    Posted June 4, 2016 at 8:29 am | Permalink

    Off topic

    I see the remain side are still trying to get the Gross £350 million a week figure discredited.

    Can I simply suggest that LEAVE liken it to salaries advertised when advertising or looking staff.

    People when looking for a job also look at gross pay as the attraction not net.

    Thus gross figures are always used and quoted, not the net take home pay.

    The Company is in charge of the gross pay, the government and individual circumstances dictate the net.
    Thus gross has to be used as Government taxes and individual circumstances are not in the Companies remit to fix.

    Same thing with the EU rebate and other returns in the form of grants, those figures have been reducing over the years, but the Gross contribution only seems to rise.

    • Lifelogic
      Posted June 4, 2016 at 8:54 am | Permalink

      Also the money we get back is hugely devalued by the EU restrictions and red tape attached to it. Perhaps halving its real value.

    • Qubus
      Posted June 4, 2016 at 1:30 pm | Permalink

      When I pay my Council Tax, of let’s say £200 per month, I don’t say, well I really only pay £50 per month because I get to use the local library, the police service is available to me, the streets are swept etc. I say I pay £200 per month; hence the gross figure of £350m per month. Furthermore, whilst no one disputes that we get an abatement or rebate, we are not able to spend this rebate in a manner that we think fit, it is decided by the EU. Why, for example, should the EU decide how much extra money be given to the universities? Why should that not be decided by our own politicians? Isn’t that what we elect them for?

      I thought that Mr Gove did rather well last night, despite the constant heckling by the interviewer. I felt that the interviewer was more disruptive of Mr Gove that he had been of the PM; I was rather embarrassed by his behaviour.

      Finally, the Remainers constantly demand a prediction from the Brexiteers of what exactly the economic situation will be post-Brexit, but a hard-and-fast forecast clearly cannot be given. No one can even guarantee that a world-wide economic meltdown will not break-out tomorrow. On the other hand, I feel we should point out more often that the Remainers can also guarantee nothing. We should be remaining in an organisation that is continously racheting towards further integration, despite the protests of the European public. There is little doubt that, should we remain in the EU we shall ultimately be forced to join the Euro; Mrs Merkel has intimated such.

      And as for Turkey not joining the EU in the foreseeable future, how did Greece manage to join when it clearly didn’t satisfy the entrance criteria?

      Reply The rebate is different to the payments of cash out of the EU budget – the issue over that is how permanent, given the wish of the others to stop it, and the way Mr Blair gave big chunk of it away.

      • Denis Cooper
        Posted June 4, 2016 at 6:11 pm | Permalink

        As I had half-remembered, the UK rebate for a particular year can only be worked out after that year has ended.

        https://en.wikipedia.org/wiki/UK_rebate#Calculation_and_mechanics

        “Calculating the size of the UK’s annual rebate is complex. Broadly, the UK gets back 66% of the difference between its share of member states’ VAT contributions and its share of EU spending in return. The European Commission sets out the detailed calculations in a working document. The calculation of the rebate for any one year is budgeted and paid for the following year, and the payments are subject to revision for up to three further years. There is no transfer of money from the European Commission to the UK Treasury involved; the effect of the rebate is to reduce the size of the UK’s payments.”

        So it’s not like buying something with a ticket price of £100 but getting a 20% discount upfront and therefore only paying £80; it’s more like buying something with a ticket price of £100 but using a voucher for 20% off your next purchase which you were given when you made your last purchase, and therefore only paying £80 on this occasion.

        However I wonder whether the same accounting procedure also applies to any of the other repayments from the EU, that they are just used to reduce the size of the monthly payments from the UK to the EU and “There is no transfer of money from the European Commission to the UK Treasury involved”; so then it could equally well be said that eg the CAP money also never leaves the country, which is the rather specious line being taken by the Remain side to attack the £350 million a week gross figure.

  18. formula57
    Posted June 4, 2016 at 8:38 am | Permalink

    The investment banks have long enjoyed a safe and accommodating haven in London (for example, by unfettered hypothecation opportunities) and those leading them I doubt not recognize that those businesses are materially more wealthy today than they would have been without that haven. It is a pity that they parrot the Remain line, presumably as they suppose it will please those able to provide safety and accommodation in future to support their continued wellbeing.

  19. Dame Rita Webb
    Posted June 4, 2016 at 8:39 am | Permalink

    Has anybody asked Bernie Madoff on how he would vote?

  20. formula57
    Posted June 4, 2016 at 8:41 am | Permalink

    Meanwhile, well-off topic, I see reports today that the universe is expanding faster than thought hitherto. As Mr Cameron and pals have not blamed this on Brexit, I presume it is a good thing?

    • Denis Cooper
      Posted June 4, 2016 at 4:50 pm | Permalink

      As I read the UK Treasury was involved in the theoretical calculations leading to that surprising conclusion, so there is no need to worry about it .

  21. Bert Young
    Posted June 4, 2016 at 9:45 am | Permalink

    Many years ago a French Bank requested my organisation to put together a team in London ; they did this for 2 reasons , one was they planned significant international expansion ,the other was the presence they had in Paris was subject to over-rigorous controls and lack of the desired skills . The Bank thrived and became a magnet to its key employees to come and work in the City of London . Paris and the French constraints have not changed .

    Today most of the financial institutions are in the City because the talent base available is there , it is supported by experienced and skilled staff and , it is a continuing attraction to high numbers of talented graduates who are developed and fed by our prestigious universities . US and other countries who seek to expand their markets and influence will not find it the same were they to shift some , or all of their operations to other locations in Europe ; they have too much at risk and will not expose themselves to change .It was interesting that China – with all the choice they had , chose the City of London as the place to organise and run much of their reserves ; with the possibility of “Brexit” on the horizon , why did they chose London ?.

  22. graham1946
    Posted June 4, 2016 at 10:01 am | Permalink

    The reason people despise American Investment Bankers is not through knowledge of what they do, but their effects – i.e. crashing the world economy by selling rubbish dressed up as bargains and walking off, whilst the poor of the world carried the can and still do, as will their children who have to pay off the debts, whilst they cream it off for new yachts etc. Gods work (some investment banks ed) reckoned. More like the devils.

  23. Stewart Watts
    Posted June 4, 2016 at 10:52 am | Permalink

    Thank you for a very informative piece Mr Redwood, I’d mentioned in a previous thread that this was a concern of mine so it was great to read such a post. I’ve done some reading around MIFID II, this summary from Norton Rose is a good one I think:

    http://www.nortonrosefulbright.com/knowledge/publications/115128/mifid-ii-mifir-series

    I note that indeed under the current draft a “third country” firm operating under regulations such as those we operate under now will have a lot of freedom to sell to professional investors from outside the EU. On the other hand selling investment products to retail will require a branch office in the EU, which as you rightly point out every major investment bank already has.

    MIFID II doesn’t come into effect until Jan18 however; I was wondering if you see any risk of other EU members pushing through a regulatory change in our absence to restrict sales to all types of investors to being through branch offices only? Objectionable as they may be, the people involved in Sales & Trading of investment products pay a lot of tax and spend a lot, so I can’t see why other EU members wouldn’t try and push for this or who in our absence would try and veto such a change.

    Even if the regulations stay as they are now, if conducting business out of the U.K. is in any way restricted, in the sense that a UK branch employee could only conduct business with certain European clients, whereas a Dutch branch employee could conduct business with all clients, would you see a foresee a slow and gradual drift of financial businesses away from the UK? I agree a step-change is unlikely.

    Reply No I do not think this bad outcome likely

    • Denis Cooper
      Posted June 4, 2016 at 4:45 pm | Permalink

      Hold on, even after we have voted to leave the EU we will still be in the EU for maybe two years, with exactly the same voting rights and veto rights as now – with one exception that obviously we will not have a vote on the common position of the other member states for their side of the negotiations on our withdrawal.

    • Richard1
      Posted June 5, 2016 at 8:36 am | Permalink

      It would be possible to do the value added work in the Uk but book the transaction elsewhere, in the EU. Eg all private equity funds based in London (and many elsewhere) manage funds domiciled in Guernsey where the fund admin services are, and it is from there that transactions are formally booked. They have offices or representatives in Guernsey but it’s a very small part of their total organisations – the highly paid employees and value added work is done in the financial centres where they need to be, mainly London.

      • Richard1
        Posted June 5, 2016 at 8:37 am | Permalink

        Or Jersey

  24. A different Simon
    Posted June 4, 2016 at 11:42 am | Permalink

    I don’t have a problem with true investment banks either .

    What I have a problem with is referring to companies like G.S. and their ilk which trade massively on their own account as “investment banks” rather than “hedge funds” .

    This is yet another example of the elites controlling the terminology in an effort to stifle real debate .

  25. Mitchel
    Posted June 4, 2016 at 12:52 pm | Permalink

    I worked for one of the smaller City houses for eighteen years,most of that period we operated as a partnership with all the risk that entailed.After we converted to limited co status (and even more so after we sold the business to a large foreign financial conglomerate),I found the business much less stimulating and I also found the business expansion targets set by our new owners were at odds with maintaining a high reputation.As a result,many of the senior staff,including myself,left to join- or set up-boutique businesses in the sector.Like our host,I am totally confident the industry will prosper outside the EU.

    • A different Simon
      Posted June 5, 2016 at 11:21 am | Permalink

      Mitchel ,

      A person would have to be a sociopath to thrive in the environment you described under the large foreign financial conglomerate .

      Such companies and people hog the limelight and give the banking sector and wider finance sector an appalling image .

      I also don’t think they are much help to smaller businesses either .

      I’ve stumbled on two early stage companies recently which must have been picked over and discarded by the big end of town which goes to prove there will always be opportunities for boutique operators and private investors .

    • A different Simon
      Posted June 5, 2016 at 11:26 am | Permalink

      PS

      In the wise words of Benjamin Franklin which are highly relevant at the moment :-

      “Sell not virtue to purchase wealth, nor Liberty to purchase power.”

  26. Dunedin
    Posted June 4, 2016 at 3:28 pm | Permalink

    Thank you Mr Redwood for your response to my question – you present some very useful arguments to counter the Remain scares.

    I suspect there is little enthusiasm amongst London based investment bankers for a move to Frankfurt or Paris, and believe they would try to limit any requirement to move operations to the EU – good news for brass plate makers. The logistics of moving an industry the size of UK investment banking, and its attendant admin, legal and accounting requirements, to Europe would be very difficult anyway. Of course, if Frankfurt or Paris were to become home to all these well remunerated bankers, the EU might be tempted to nobble their bonuses with some draconian revisions to the rules on bonus caps – how terrible…

    Yesterday (3 June) was tax freedom day – 154 days of working for the government (4 more days than last year). Watching last night’s Sky debate, with all the arguments about the size of our contribution to the EU, got me thinking about our contribution in terms of pennies on income tax.

    I believe a 1p increase in income tax raises approx. £4.5-£5bn (please correct me if wrong) – on that basis our £10bn net contribution equals 2p on income tax. A question for Remain supporters – “if we were not in the EU, would you be happy with a 2p income tax increase to join?”

  27. Dennis
    Posted June 4, 2016 at 4:14 pm | Permalink

    Perhaps of interest:-

    This year’s Prague European Summit takes place from 6 to 8 June at the Lobkowicz Palace in Prague Castle. The Summit, held for the first time in 2015, provides a platform for high-level strategic debate on the future of the European Union. With a focus on economic, social and foreign-policy, it is an initiative of three prominent Czech think-tanks: the Institute of International Relations, European Values and EUROPEUM Institute for European Policy.

    Highlights include a workshop on Tuesday 7 June convened by Eurozine editor-in-chief Wojciech Przybylski, together with Dalibor Rohác, a research fellow at the American Enterprise Institute. The workshop considers whether Europe needs a common political identity in order to enter into joint political decision-making, as opposed to ad hoc cooperation between sovereign nation-states – and what needs to change in order for common European decision-making to avert the kind of populist backlashes seen in the wake of ongoing eurozone and refugee crises.

    In an Oxford debate the same day, regular Eurozine contributor Anton Shekhovtsov argues in favour of the motion “EU member states should transfer their sovereignty to the European army”. Arguing against the motion is Martin Michelot, head of research at EUROPEUM Institute for European Policy; the debate is moderated by Henry Foy, Central Europe correspondent at the Financial Times.

  28. Denis Cooper
    Posted June 4, 2016 at 4:31 pm | Permalink

    A good article on Spectator blog today, JR, and you’ve got a lot of support.

    reply Thanks

  29. Denis Cooper
    Posted June 4, 2016 at 4:36 pm | Permalink

    If these companies could so easily adapt to life outside the EU the question must be why they are so keen to keep us in the EU. Just not wanting the trouble of adapting seems a rather weak reason, so I think there has to be something else behind it and that could be that they’ve got nice cozy lobbying relations set up and fear loss of backdoor influence. Would that be a good reason for a UK citizen to vote to stay in the EU? I think not.

  30. Colin ?Hart
    Posted June 4, 2016 at 7:09 pm | Permalink

    A measured and well-reasoned post. But if investment banks do decide to up sticks and go, we shouldn’t shed too many tears. We might just end up with a sensible market economy where people make things, sell things, are reasonably honest and prosper gently. House prices might return to sensible levels that people can afford (even if oldies such as myself have to take a hit), financial markets might rediscover their role in raising capital for innovative businesses rather than trading in meaningless derivatives and we might just have a real democracy.

    If we don’t care about any of the above, then the future belongs to Wall Street crony capitalism governed only by EU regulation.

  31. GEORGE PECKHAM
    Posted June 4, 2016 at 9:46 pm | Permalink

    WELL WE ALL DID BEFORE THE EU GOT IT’S NOSE INTO OUR BUSINESS AND STARTED DRAINING ALL OUR OUR MONEY!!!!!WE MUST GET OUT OF THAT EU BEFORE THEY TAKE ANYTHING ELSE OFF US AS THEN THIS COUNTRY WILL BE BROKE!

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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