Financial services will be fine after Brexit

Critics of Brexit on this site have regularly alleged that if we do not get the same access arrangements as today to the EU market after Brexit, the City will lose jobs and business to the continent. I have been accused of complacency for thinking that is untrue.

I have pointed out we were told the UK would lose jobs, influence and business if we refused to join the Euro. We did decline to give up the pound, and our business in Euros grew substantially. Attempts to prevent clearing in London failed, as of course if you run one of the world’s large trading currencies you cannot stop non members of your union trading the currency and securities in it. Business goes to where the talent is and where the capital to execute the transactions resides.

This week there has been a most important statement from the CEO and Chairman of one of our major banks. Barclays has said that they do not see any need to transfer personnel from London to elsewhere on the continent, whatever the outcome of the Brexit talks. They also state that the technical changes they are making to ensure continuity of EU business are less complex than the changes they had to make last year to comply with new business rules in the US, or the large task of ring fencing their commercial bank in the UK to comply. They confirm that complying with any new EU arrangement will be cheaper as well as easier than these changes.

London out of the EU like London inside the EU will face competitive challenges from all round the world. IF you are good at something you need to get better at it to maintain your position. You constantly have to strive to improve and to keep up with or lead change. There is no reason why London should stop doing that once we are out of the EU. In some ways it will be easier, because we will be free to decide on our own arrangements with the rest of the world without having to adopt the EU model for that. The UK will regain its vote and voice in the global talks and formal bodies, where today we often have to be represented by the EU instead.

As Barclays said “We are confident we have multiple choices for how we might continue to serve our customers and clients regardless of the outcome. (Of Brexit)”

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1XU

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  1. Posted May 13, 2017 at 5:38 am | Permalink

    Indeed but the main thing that makes London less competitive is the huge over taxation of higher paid workers. The 45% income tax + NI, the counter productive mugging of non doms, the absurdly high stamp duty on expensive houses, the restrictive employment laws, the attacks on the tiny permitted pension pot sizes and above all the punative IHT rates and tiny thresholds. The Tories have still have not kept the £1M theshold promise, made many moons ago by ratter Osborne.

    In the UK you get £325K each then 40% of you property is stolen of you. In the USA you get over $5.49 million each (and increases with inflation) and then tax start at only 18%.

    Hammond’s misguided fiscal attacks are the biggest danger to the city. Also May’s absurd agenda to “build on EU worker rights”, to force gender pay reporting and other lefty, PC insanities.

    • Posted May 13, 2017 at 6:02 am | Permalink

      The pension pot limit has been cut to just £1M and this now only lets you get a pension of only about £30K PA max. It is not even a tax break in the main, it is still taxed when drawn.

      The IHT threshold has been £325K since 2009 shrinking every year with inflation another huge steath tax increase.

      Stamp duty (a turnover tax at up to 15%) is completely bonkers too.

      All so so the government can continue to piss money down the drain on halfwitted things like expensive energy/renewables, a bloated inept state sector, Hinkley C and HS2.

      • Posted May 13, 2017 at 8:31 am | Permalink

        Plus of course the large sum of tax payers money used to augment the feckless and the many people perfectly capable of working who simply choose not to.

      • Posted May 13, 2017 at 12:14 pm | Permalink

        UK house sales fall to lowest level since EU referendum I see.

        Well if it costs you perhaps £100K in stamp duty just to move home it is hardly surprising. So the government raise the tax rates, force people not to move yet just raise less in tax and inconvenience people.

        Hammond should go after the election. We need to and get a proper, economically literate, lower & simpler taxes chancellor. One who does not want to mug the self employed, landlords, tenants, house movers, pension pots, dead people and indeed everyone quite so much.

        One is not the pathetic puppet of the treasury and can cut out the endless waste. Preferably someone who actually understands maths, science, energy production, business and economics. This rather than one who just has an Oxford PPE degree.

        • Posted May 13, 2017 at 7:48 pm | Permalink

          Small builders around here seem to having a great time, as you say the cost of moving is so high a lot of people are staying put and re-modelling their current homes…

        • Posted May 13, 2017 at 11:30 pm | Permalink

          Given you are correct in your assertions, regarding the ripping off of the tax paying populace, which in most cases is self evident…when has there ever been a time when the treasury has not been legally robbing its citizens.

          I fear your hopes and desires will fall short on politically driven, self-seeking, incompetent deaf ears again!..sadly!

          Incidentally, I also share your viewpoint on useless, non-productive degrees! Universities providing worthless degrees in their quest for higher revenues are damning our young adults to a future of financial misery!

          • Posted May 14, 2017 at 8:24 am | Permalink

            Indeed only about 25% of the degrees (if that) are actually worth the circa £75K of debt they build up and the loss of income for the three or more years. Many would learn far more useful stuff while working.

      • Posted May 13, 2017 at 5:04 pm | Permalink

        I note the looney tune remainiacs are still trying to scare and insult whoever they can, Blaire, Campbell, Clegg, EU (advocates ed). Could we have more true MP leavers in the cabinet? Could we have JR as Treasury Secretary to keep an eye on Hammond?

        Sad to read leave supporting MEPs kept out of safe seats by CCHQ after it is acting in such a dictorial way to local Conservative Associations.

        • Posted May 14, 2017 at 9:14 am | Permalink

          My flip side version to the The3Million web site:

          The 1million+ UK citizens living in the EU are suffering because of the current uncertainty over their ability to continue to live their lives normally after exiting the European Union on 29 March 2019. We came to the EU in good faith and we have made the EU our home. 
          This is why we call on the negotiators on both sides to decouple citizens’ rights from the main Brexit negotiations and agree an early deal to secure the rights of UK citizens in the EU – all Britons living in Europe.
          We call on the EU to unilaterally guarantee the rights of UK citizens in the EU post-Brexit. These UK citizens need their rights guaranteed now. Not at some distant point in the future.
          Assurances are not enough. They do little to change the uncertain and bleak future faced by many of us in the wake of the referendum and forthcoming Brexit.  The anguish and long-term stress that this is causing to individuals and families are immense.
          These UK citizens came to the EU in good faith and they have made their home here. They contribute on every level and in every sector of EU society.  Many families and individuals are already severely affected by the current EU regulations; families are being torn apart. 
          The most vulnerable, people with disabilities, people with long term health conditions, older people, parents, victims of domestic violence, people on low income – are frequently unable to obtain permanent residency even though they have lived here for decades. This is an unacceptable situation in a European Union which prides itself as a fair and open democracy.
          We have launched a new online campaign to bring awareness to the extreme difficulties that UK citizens and their families are facing.
          Following the referendum on 23 June 2016, a shock wave has been going through the communities of British EU citizens who have built their lives in this country without thinking that one day, their rights to live, to work, to study, to raise a family, to run a business or to retire would be questioned.

          • Posted May 15, 2017 at 3:17 pm | Permalink

            Nigel Seymour,
            Long before the eu was even invented, British citizens lived, worked, studied, raised a family, ran a business and retired to many eu countries, it is the remaniacs who are putting these pressures on people by falsely gazing into their crystal balls and scaring the living daylights out of some people who cannot handle the “wait-it-out” prospect.
            Why do people like yourself, even think of these scenarios, why?
            We will all be able to do as we did before, as we pay extortionate taxes to reside in these countries.
            Do you think that the eu will change any of that?
            As if they did, their countries would not run like clockwork, without the British putting money through their shops, buying houses, their businesses…
            Without us living there etc, their economies would grind to a massive HALT!!!
            Sp…STOP Worrying and be Patient!

    • Posted May 13, 2017 at 8:07 am | Permalink

      @LL; “the main thing that makes London less competitive is the huge over taxation of higher paid workers.”

      Really, compared to other EU28 countries?…

      Just admit it Mr Lifelogic, you just hate the though of having to pay tax, you would baulk at it the rate was 0.05%.

      • Posted May 13, 2017 at 7:46 pm | Permalink

        Jerry, Lifelogic although a bit repetetive, is 100% correct.

        • Posted May 13, 2017 at 7:47 pm | Permalink


      • Posted May 13, 2017 at 10:39 pm | Permalink

        Not at all 20-25% of gdp sounds just fine to me and is plenty for the government to do what is should be doing. The tax base few would also then be far larger.

        • Posted May 14, 2017 at 6:55 am | Permalink

          @LL; The next problem then is who is to decide what the state “should be doing”, the self-interested individual or the elected government. There are many who have questioned the theoretical models used to calculate the Laffer Curve. His assumption with regards a 100% tax rate is obviously wrong.

    • Posted May 13, 2017 at 6:10 pm | Permalink

      Agreed. I have been surprised by the number of people I know who have left the UK to escape either the non-Dom charge introduced by George Osborne and/or inheritance tax. IHT has been abolished eg in supposedly egalitarian Sweden, time we got rid of it here. Stamp duty likewise is now absurd and must be a major deterrent to people thinking of living in London. If we want London to continue to be the leading financial centre in Europe then it’s very simple – make it much more attractive for the people who work in the global financial sector to live and work here. That means cut the top rates of income tax, get rid of IHT And get rid of or massively reduce stamp duty. And I’d suggest hugely cutting or getting rid of the non-Dom charge. Hopefully as we near Brexit and beyond it, the govt will be forced by circumstances to ensure a relentless focus on competitiveness. It certainly isn’t clear Mrs May and Mr Hammond have got there yet. We can’t afford virtue signalling now.

      • Posted May 13, 2017 at 11:09 pm | Permalink

        I agree entirely.

      • Posted May 13, 2017 at 11:09 pm | Permalink

        Competitiveness = good.

    • Posted May 14, 2017 at 10:27 am | Permalink

      Absolutely right. A great deal needs to be done to get UK sorted out and re-equipped to become a fully independent self-governing nation once again. I really have no confidence that Mrs May has any ideas beyond the nursery school of social care. However, she is the only politician who, in the current situation, can take UK out of the EU. Since nothing can improve until that is done, we’ll just have to put up with her blackmail – yes, that is what it is, for she is going to make us pay for Brexit – until Brexit is delivered. It probably won’t be a full English Brexit, but let’s hope it will be enough. Then we can search for a better PM. Saw video of Michael Gove speaking at that Remoaners’ conference the other day. Pity he is not PM – or John Redwood, of course!

  2. Posted May 13, 2017 at 5:45 am | Permalink

    As the comparative levels of regulation are a lot looser in London than in other major financial centres around the world, especially on Wall St. You should ignore any “threats” to leave when the UK becomes EU free.

  3. Posted May 13, 2017 at 5:46 am | Permalink

    Other CEO opinions are available, not just those that agree with the required narrative! The truth is, no one will know who is “correct” until after actual Brexit, or until at least we have a a much clearer idea what if any the A50 agreement will be. #crystalballgazing

    • Posted May 13, 2017 at 1:21 pm | Permalink

      Its only a different way of doing business, more direction, more control
      We will adapt and we will be sucessful
      If the CEO ‘s wish to remain CEO’s they will adapt to

  4. Posted May 13, 2017 at 5:59 am | Permalink

    Quite so. Long before Brexit, Frankfurt and other centres, sought to take some of what London has, often with the support of the EU bureaucracy.

  5. Posted May 13, 2017 at 6:52 am | Permalink

    One remembers the “Captains of Industry” throwing their weight behind the Remain campaign in their hoards. Those companies and their staff should now be encouraged to leave the UK. Stripping them of whatever banking and trading licences on some grounds or other could be a first step . There is not much Britishness about them.

  6. Posted May 13, 2017 at 7:02 am | Permalink

    Providing logic, common sense and self interest prevail amongst our EU partners it should be as you suggest. There will be a lot of noises off in the next two years, providing food for the press, but remain resolute and clear in our approach to Brexit and pragmatism will result. As I said two days ago, no deal is better than a bad one.

    • Posted May 13, 2017 at 9:24 am | Permalink


      Haven’t you heard?? The Eurovision song contest will be lost because of Brexit!! Yes, you couldn’t make it up.

      • Posted May 13, 2017 at 11:41 pm | Permalink

        Your comment is a little bereft of information.

        I have read two articles on this particular matter and neither purport to agree with your findings. Please link me to where it states: “The Eurovision song contest will be lost because of Brexit!!” Thank you

        • Posted May 14, 2017 at 9:20 pm | Permalink


          The journalists on the BBC kept repeating that our results would be worse because of Brexit.

  7. Posted May 13, 2017 at 7:15 am | Permalink

    I like Mrs May’s promise to allow people to wipe their past indiscretions from social media. Keep it simple , a click of the mouse and a click of confirmation. It should not be a facility that users have to search for in a labyrinthine website. All users should be as aware of the dangers as they are now of smoking. Social media is much more than an opportunity to keep in touch with your friends, it is an information gathering system for the benefit of it’s ultimate owners. How do you think they got so rich and almost untouchable. They will be supported by those who benefit from all this gathered data, be it governments or commercial entities.

    • Posted May 13, 2017 at 8:28 am | Permalink

      @agricola; It’s impossible wishful thinking that people should be able to delete their internet pasts but then keep their user identity! It only needs someone else to have quoted the indiscreet message, reposted the indiscreet image or what ever together with the original posters internet ID and these youthful past indiscretions get preserved on another’s account or perhaps even elsewhere – and often fully searchable…

      The only method that could work is deletion of the account and thus user ID, at least at the public level and search engine level, many social media and other websites already offer this.

      • Posted May 13, 2017 at 7:58 pm | Permalink

        I thought it was Amber Rudd, but in any case you are right Jerry, will not happen unless you delete the whole Internet. Have you tried to get Google to not follow you? Turn it off then a few weeks later as if by magic, back on again Grrr…

        She was also advocating that ISP’s should be forced to supply decrypted customer data, completely idiotic.

        Is she suggesting that “back doors” be built in to banking applications?
        What a numskull…

      • Posted May 13, 2017 at 11:45 pm | Permalink

        Deleting your Account/ID does not delete your identity or history, it is stored forever….sorry to disappoint you!

        • Posted May 14, 2017 at 6:59 am | Permalink

          @Dennis Zoff; It deletes it from public access, and that also means 99% of future employers.

  8. Posted May 13, 2017 at 7:18 am | Permalink

    This is another claim that after Brexit everything will be the same but everything will be better.

    We don’t know how our banking will be affected by Brexit, but we can surmise that its business with the rest of the EU is more likely to be harmed than helped.

    We don’t even know if the prediction that “the UK would lose jobs, influence and business if we refused to join the Euro” did turn out to be false. It’s quite likely that the we did not get all the benefits that we would have got if we had joined the euro, but there is no reliable way of working out what extra business we might have got. The existence of the euro did help our exporting businesses by making it easier to export to many other countries using one currency instead of 19. It has made it easier for all of us who go on holiday there.

    • Posted May 13, 2017 at 8:53 am | Permalink

      Alan, your last sentence says it all! Easier for (presumably multiple centre) holidaymakers! I used to enjoy using different currencies when abroad – part of the fun. When I buy shares, whether EU, US or EM, I have no trouble with currencies. Why? Well protected computers make life easy…

    • Posted May 13, 2017 at 11:33 am | Permalink

      The prediction was for disaster if we declined to join the euro, but that disaster did not happen and to the contrary it has proved to be a very wise decision to keep out.

    • Posted May 13, 2017 at 2:08 pm | Permalink

      Alan – I think the influx of EU economic refugees from the Eurozone (leading to Brexit, ironically) attests to the benefits of being out of the euro and being able to set our own interest rates.

  9. Posted May 13, 2017 at 7:29 am | Permalink

    There was an interesting development on this issue this week, which made it into the press but not onto the BBC. The EU as we know is threatening to insist that euro clearing – a major business area for the City – takes place through institutions physically located in the EU. But the US has now said they would not accept this and if it is implemented the US would retaliate. There is after all no precedent for such a rule as the EU threatens to enforce. It seems unlikely the EU will wish to take on the US in a tit for tat trade war over this issue, so we can probably forget about this particular threat.

    • Posted May 13, 2017 at 11:39 am | Permalink

      Yes, that is a very interesting development. Of course there is now more than the usual unpredictability about US policy but if that is going to be their line that should help us a great deal. I don’t think there are any strong rational economic or financial grounds for the EU proposal, any more than for their insistence that trade and immigration must be lumped together in their inseparable “four freedoms”.

    • Posted May 13, 2017 at 4:58 pm | Permalink

      The UK won the case, after four years, to keep Euro clearance in the UK, simply based on one or two of the “four freedoms” in the Treaties. The TFEU will have to be changed, to give the ECB the required competence to dictate where Euro clearance can happen, just like the US FED can.

      London clears two to three times the Euro FX and Derivatives that New York does. The thing to remember is that come the next 2008 financial crash; when the markets run out of “liquidity” (cash money), the only place you can get an unlimited supply of Euro is the ECB. Likewise for the US$, the US FED. Likewise for the Pound Sterling, the BoE. And, it will cost you plenty and those Central Banks, nothing. Central Banks and their Sovereign Treasury sponsors, can never go broke in their own sovereign fiat currencies.

      Post Brexit, we will not have a Luxembourg Court to find in our favour. Outside the EU, there is no guarantee, yet, that the ECB will “liquefy” the London Euro market in a 2008 crash type situation. That makes London high capital risk.

      Remember that Sovereign Central Banks, around the planet, are umbilically connected to each other. They operate above the trials and tribulations of mere mortals that exist on the surface of this planet. You will find little evidence in their archives, that World War 2 ever happened. Apart that is; the Swiss coming out of WW2, three times richer than it went in; not that it actually went in you understand.

      • Posted May 14, 2017 at 10:50 am | Permalink

        “Post Brexit, we will not have a Luxembourg Court to find in our favour.”

        What a strange statement. Either the Commission proposals had a satisfactory legal basis in the present EU treaties or they did not; the ECJ decided the latter, and presumably it would have come to the same decision even if the UK had not been a party to those treaties.

        • Posted May 14, 2017 at 9:35 pm | Permalink

          It is also clear that new laws and regulations will be introduced to further integrate the euro zone. The EU could simply change the law to enforce this change irrespective of past rulings of the ECJ, unless of course the EU is deterred from such a protectionist measure by the US and others.

        • Posted May 15, 2017 at 10:47 am | Permalink

          Denis. The ECJ judgement was against the ECB, not the Commission.

          However, once Brexit occurs and the UK is outside the EU, the ECJ judgement will be turned against the UK, according to Rob Moulton, a London-based partner at law firm Ashurst. “What we did in the EU to try to protect ourselves will come back to shoot ourselves in the foot [with] Brexit, because we have already argued before the European courts that you cannot discriminate within the EU to clear euro-denominated securities.

          But we’re about to become a third country. The ECJ has said the ECB does not have the power to decide who can and cannot clear euro-denominated securities, but the Commission does, and it can use our own arguments against us.”

    • Posted May 14, 2017 at 12:21 am | Permalink

      Thank you for the link, appreciated.

      It must be rather amusing for those individuals in the Banking business, general Corporate business or simply smaller companies plying their goods throughout Europe, watching all this Press click-bait puke driving people’s opinions.

      The Press does not know what the eventual outcome will be and for sure neither does most of the ill-informed population. But one thing is for sure, those professional business people at the coalface are predicting no serious change post-Brexit, other than the usual unpredictable vagary of business in general. In fact, there is only optimism in the air!

      I personally have not had one conversation with my customers/colleagues in Europe that have suggested a negative impact on business going forward…other than their annoyance at the political posturing and puerile Press releases…which is predominately the UK press!

      In general, if one has a superior product at the right price, companies in Europe will buy, regardless of any political shenanigans!

  10. Posted May 13, 2017 at 7:30 am | Permalink

    I am one who has been fearful for our financial services post Brexit. However your article today and the fact one of the largest investment foreign investment company has declared that it is coming to London makes me think that I have been misinformed. No doubt deliberately so by the EU and remainers who have been spreading malicious and untrue facts about the dangers of Brexit. It appears that if you throw enough mud some will stick and they have been throwing great gobbets of it in the form of unsubstantiated claims of doom and disaster on all things Brexit. On financial services it has done so.

    One thing is certain the EU is going to go for the punishing the UK for it’s audacity regardless of the cost to itself or the fact it will not actually harm the UK beyond some short term inconvenience. That is if Theresa May does go for the no deal is better than a bad deal option. However I have the feeling that she is not going to. It will depend on the make up Tory MPs after the election and it appears hard Brexit Tories are being weeded out of the selection process and Theresa’s predilection to remain is heavily influencing her.

    • Posted May 13, 2017 at 9:27 am | Permalink

      I agree with the concerns noted in your last sentence about “hard Brexit Tories being weeded out”. There is no hard Brexit, only Brexit, but it would appear those MPs who prefer some sort of attachment to the EU (and not a proper break that we voted for) are succeeding in strongly influencing Theresa May. Mr Redwood, what are your views on this, or do you think we are being fed misinformation?

      reply Yes, I think you are being misled. The PM has said herself there is no such thing as hard or soft Brexit

      • Posted May 14, 2017 at 7:53 am | Permalink

        My understanding of hard and soft Brexit is the latter is continued membership of the EU probably on terms something akin to EEA/EFTA membership. Hard Brexit is to leave without a deal as Brussels has made it abundantly clear they have no wish to conclude a sensible trade and cooperation deal. So for me there is indeed such a thing as hard or soft Brexit. My belief is that soft Brexit will be adopted and touted as a transitional arrangement. I may hate the idea of that but in terms of practicality it has some attraction.

  11. Posted May 13, 2017 at 7:36 am | Permalink

    Why did I not hear this important announcement on the BBC? We are always told if banking/finance jobs are going to the EU countries…oh, I think I’ve answered my own question.

  12. Posted May 13, 2017 at 7:44 am | Permalink

    “Business goes to where the talent is and where the capital to execute the transactions resides.”

    And that talent is chained to London by the money it has vested in London and SE housing. Few can ‘escape’ by cashing in their equity and taking it to Frankfurt, Paris, Amsterdam – Dublin.

    As soon as small but significant numbers sell up property values collapse and those remaining are stranded, unless they are prepared to go impoverished to EU cities undergoing a boom in their own property values.

    “They can let their properties out instead.”

    To whom ? The unemployed ?

    No. 95% of talented Londoners have no choice but to stand and fight and that talent is Britain’s strength – they are not quitters and do not settle for failure.

    • Posted May 15, 2017 at 4:06 pm | Permalink

      Here, Here Anonymous 🙂

  13. Posted May 13, 2017 at 8:00 am | Permalink

    Off topic, but even the Guardian is finally coming over to our point of view, ref Irish exports:

    “He said that businesses like his might have to face the challenge of cut-cost meat from South America or New Zealand if Britain sealed new trade deals. “These could wipe us off the map completely. They could flood the market,” he said.
    All three businesses say it would take “years” to build alternative markets if the UK went out of reach because of tariffs.
    “We have been the breadbasket for the UK since the inception of the Republic, most of our exports go to the UK…..”

    • Posted May 13, 2017 at 2:18 pm | Permalink

      I don’t suppose “theguardian” (a pathetic organ that believes in the political correctness and equality of the alphabet and cannot bring itself to use a capital ‘G’) came up with the obvious solution to the Irish farmers concerns? IREXIT!

  14. Posted May 13, 2017 at 8:32 am | Permalink

    With a Macon, Merkel and Junker lining up against us I cannot see how we are going to be any better off than we are now. I have a bad feeling about this one and the talks haven’t even begun yet. If the exit talks are not agreed to in whole then the prospect of a crash out is very real and in those circumstances we are is serious trouble. Yesterday Michel Bernier was in Ireland sizing up the border and Tony Blair was also out and about talking about disaster looming.. so there are other people as well who are likely to have a different take on all of this- its hard to know what to believe- we’ll just have to wait and see

    • Posted May 13, 2017 at 10:03 pm | Permalink

      Did you see Gerry Adams sitting behind Barnier as he spoke? Of course the EU will gang up with anyone ill-disposed towards us – the SNP, the IRA – but that doesn’t mean we should roll over or that there aren’t forces on our side. Don’t think in terms of “crashing out” but “soaring out”.

    • Posted May 15, 2017 at 4:10 pm | Permalink

      From what I have seen and heard, over the years, if Tony Blair says anything…
      Just go the Opposite Way !!!

  15. Posted May 13, 2017 at 8:52 am | Permalink

    So faced with the reality of Brexit, one leading bank (doubtless amongst many) shows it is quite capable of coping, has recently coped with a greater challenge, and of doing so in the UK!

    Perhaps though Barclays is complacent, failing to recognize it is in the midst of a struggle for western values, the enlightenment and the idea of truth itself. (I mentioned that latter when justifying a renewed post-referendum splurge to my Capex Committee (her indoors) and was gratified to be met with a blank stare in lieu of the usual objections. I would think Barclays might do the same if those notions were put to it.)

  16. Posted May 13, 2017 at 9:43 am | Permalink

    The City has considerable experience and talent . It will always face competition of one sort or another in the future as it has done in the past . London and New York are far more consequential as centres of financial influence ; the noises coming from Euroland are sounds of fear and introspection – they may try to nibble away at what we have but they will never be able to effectively replace the City .

    I do agree that the Government has to continue to attract businesses of all sorts and levels of taxation are an important ingredient . Hammond – or whoever is in charge of the economy , has to get this right .

  17. Posted May 13, 2017 at 9:58 am | Permalink

    Although it’s not in the financial sector, the American company that my daughter works for in their European HQ here in Britain, says they are definitely not moving to stay within the EU. The main reason is that they apparently prefer to operate under UK law and particularly under UK commercial law where contracts are written in English. The other is that the second language of the customers in the EU that they are dealing with is invariably English which is now the second language of choice for most Europeans, contrary to anything that the French might try to get you to believe!
    I imagine many other companies will think the same.

    • Posted May 13, 2017 at 7:40 pm | Permalink

      English is apparently the language of choice for the Eurovision Song Contest – I’m not going to reveal how I know 🙁

    • Posted May 14, 2017 at 6:22 am | Permalink

      When I worked for a big French company I was surprised to find that their working language is now English, largely because of the reasons you site. That certainly wasn’t the case twenty years ago.

  18. Posted May 13, 2017 at 10:03 am | Permalink

    Off Topic.
    The NHS cyber attack demanding money. The first thing I heard on the radio this morning was someone saying the system was vulnerable because some computers were still running on XP. ( Clearly money would provide the upgrade he wanted). So, it seemed we either should pay one ransom demand for money – or the other.

  19. Posted May 13, 2017 at 10:07 am | Permalink

    The EU regulators will ultimately and up tying its banks up in knots – we are better out of it altogether and make our own rules subject to where we are selling; not EU rules on top of EU rules on top of local rules.

    Its laughable when ”many banks are considering Paris” (of all places!)

    The EU went to Court to enable it to dump more rules on UK Banks – they failed, but they will try again, but only whilst we are members!

    Out of it, they can do absolutely nothing.

  20. Posted May 13, 2017 at 11:05 am | Permalink

    Financial services covers a lot of ground, but as far as banking goes the EU has to know its position is weak. When the City set up offshore dollar trading in the 1950’s, they did so in an environment far more hostile than anything the EU can contrive. This was the Bretton Woods era with exchange controls, managed balance of payments etc , plus heavily regulated banking in the US (of course, all this regulation was exactly why people wanted to offshore). They faced the opposition of the US and German governments. It also undermined the reserve status of sterling (sterling crises) , so the (anti- capitalist) Labour government of the 1960’s and 1970s were unhappy.

    Compared to this opposition, the EU looks a bit toothless. Money flows where it will, whatever politicians may wish.

  21. Posted May 13, 2017 at 12:09 pm | Permalink

    As in virtually all other cases the economic value of EU membership for the financial services sector is vastly exaggerated, as much by omission as by commission. It is not necessary to actually lie to fail to point out that only a very small proportion of the jobs in that sector have any significant connection to the EU, or to fail to split its total trade between the EU and the rest of the world, or fail to even attempt to assess how much of its contribution to the economy and to tax revenues depends on membership of the EU or its Single Market.

    For example, this recent report from the House of Commons Library:

    “In 2016, financial and insurance services contributed £124.2 billion in gross value added (GVA) to the UK economy, 7.2% of the UK’s total GVA. London accounted for 51% of the total financial and insurance sector GVA in the UK in 2015. There are over one million jobs in the financial and insurance sector (3.1% of all UK jobs). The UK had a surplus of over £60 billion on trade in the financial and insurance sectors in 2016. In 2015-16, the banking sector alone contributed £24.4 billion to UK tax receipts in corporation tax, income tax, national insurance and through the bank levy.”

    • Posted May 13, 2017 at 12:32 pm | Permalink

      Likewise I’m fed up hearing Sturgeon repetitiously and dishonestly warn about huge potential jobs losses in Scotland if we left the single market, 80,000 over a decade, without any journalist ever asking her what proportion of total jobs that would be even if it actually happened.

      Well, this would be the magnitude of that “national disaster” as she puts it:

      80,000 divided by 2.6 million divided by 10 = 0.3% a year average

      which would be barely perceptible above the statistical noise.

      There is an interesting commentary here:

      “The SNP’s economic analysis of Brexit, not worth a hill of beans!”

      “Nonetheless let’s look at the headline figure of 80,000 jobs lost over ten years. That means that Scotland loses 8000 jobs a year. Compare that to my own industry, the oil industry. According to Oil & Gas UK, the industry trade association, up to the end of 2016 there have been 120,000 jobs lost in the UK from the oil price high point in 2014. Let us assume that half the losses are in Scotland. There has been a massive fall in supply chain costs of up to 50%. Compare that to a 2% assumed tariff! What do we hear from the SNP about the pain in the North East of Scotland? Practically nothing. Oil workers are a bit like SNP Brexiteers, they just don’t meet the right profile for the SNP hierarchy.”

  22. Posted May 13, 2017 at 1:38 pm | Permalink

    Dear John–We never seem to hear much about the original meaning of ‘Euro’ in the markets, as in the London ‘Eurodollar’ market, which I assume still exists. As I remember, this was able to escape US regulation and Reserve requirements despite disapproval from the US Government. Indeed this original ‘Euromarket’ was not just Dollars but any currency outside its domestic market, for example “Euroyen”, which would be created out of a simple Spot and Forward F/X Swap. Am trying to get straight why we cannot have a ‘Eurueuro’ market in London whether Brussels or anybody else likes it or not.

  23. Posted May 13, 2017 at 3:30 pm | Permalink

    As far as I am concerned all such events are bonuses against the prime reason for Brexit. That is, to take back full control of our own country. We are to become a Sovereign Nation again. No longer are we to be subservient to the unelected and the unaccountable based in Brussels.

    And that is the most important reason for wanting to leave the Oligarchy where their annual audits have failed for the past two decades yet nothing is ever done to investigate the suspicions of fraudulent activity. And that might well be a the main reason why the International Banking fraternity are not so keen to leave their London bases.

  24. Posted May 13, 2017 at 4:00 pm | Permalink

    It’s doubtful much will change at all after Brexit in the financial services industry in the UK in the short term as it has a huge professional infrastructure supporting it, particularly in the City, which simply cannot be replicated anywhere else in a short space of time. Long term there may well be bits of it nibbled away, but it would take many years. Whilst you can buy individual companies it is impossible to purchase a whole industry, and the English language is a bonus for us.

    Some form of deliberate sabotage by the EU, to their own detriment, however, is a completely different matter.

  25. Posted May 13, 2017 at 6:01 pm | Permalink

    Did anyone read the report of Mr Draghi, the ECB’s president’s meeting with Dutch MPs? It was bizarre. Normally calm, he reportedly got very angry when asked to discuss the possibility of the Netherlands or another country leaving the euro – he said joining the euro is “irrevocable” and refused to discuss the matter. Likewise when asked to discuss what happens if a Eurozone member needs to restructure its debt (clearly essential in the case of Greece and probably Italy), he also got angry and asked “why are you asking me that”, refusing to debate it. I’m surprised these exchanges haven’t received wider coverage, they show insecurity and denial of reality on the part of the Eurozone’s leading central banker.

    The other interesting development on this subject is M Macron’s logical plan for much greater political integration to make the Eurozone work – a Eurozone finance minister, banking union, cross-guarantees on debt and control of national budgets. All sensible stuff, and essential for the Eurozone to survive and enable recovery in the weaker states – but all likely to be bitterly resisted by Germany and other stronger Eurozone economies. Are the likes of Nick Clegg and the editor of the FT still in favour of the UK joining the euro?

  26. Posted May 13, 2017 at 9:47 pm | Permalink

    “Will be fine “….ah pure Redwoodese;meaningless and amenable to retrospective re-calibration . I could write it myself were it not for my personal commitment to truth.
    When HSBC moved its HQ from London to Birmingham it took three years, and it kept the government in the dark to give it freedom to manoeuvre . Barclays are unlikely to confide their plans to our pet Pollyanna. It is however, likely that the mega-beasts will find adapting relatively easy . Barclays are unusual in having concentrated their European activities in London. If I had to guess I would say this sort of statement is designed to stop an exodus of key staff
    The crunch will, come for smaller and start-up firms facing high capital requirements to trade in Europe and drift of such services to Frankfurt Dublin and Paris will be gradual
    The City will survive depite Brexit partly because it does not face a single competitor. Most asset management firms already operate across the EU and for insurance private equity and so on the compliance will not be a problem , retail banking will not be affected of course . But some sectors will be hit
    One of the worst aspects of this are the back offices which are at risk . The Largest employer in the poor County of Dorset is JP Morgan

    I don`t actually think John Redwood knows much about this , hence the fund of hedges , but he can surely grasp that if you have raise capital to trade twice , that is not a good use of capital .

    Cue some Heath Robinson argument as to why it is actually an “opportunity “ just as the plummeting pound was, the debauching of fiscal policy and the accelerated acquisition of debt .

    • Posted May 14, 2017 at 6:56 pm | Permalink

      So the Remain voting young (the ones who can’t be trusted to put litter in a bin or to buy a potato peeler) also support the bankers as well as the old white-man elite of the EU ?


      • Posted May 14, 2017 at 6:58 pm | Permalink

        … as though the acceleration of debt acquisition didn’t take place whilst in the EU.

    • Posted May 14, 2017 at 9:35 pm | Permalink


      I love reading your verbose posts, they epitomised ignorance in its purest form

      Since June 23rd 2016 the city of London added 13% new jobs, thats 90,000 more people employed in financial services in London.

      The back offices of banks are the least at risk

  27. Posted May 14, 2017 at 12:58 am | Permalink

    The lesson seems to be as it was with Mrs Thatcher: management, your job is to manage your business, so don’t come pleading to No 10 with a special case. I doubt whether Mrs May understand this because the other side of the coins is that the Government must resist the temptation to interfere, especially to impose costly and stultifying regulation and high taxes, all of which seem peculiarly attractive to Mrs May.

  • 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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