British politicians need to get their heads around what Brexit 
means for the City and soon.

The golden goose

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Mark Carney, the Governor of the Bank of England, spelt out the reality in stark terms at last month's Mansion House speech that the taxes paid by the financial services industry covers two-thirds of the annual cost of running the NHS. We neglect this golden goose at our peril.

It is bad enough if such heedlessness is the result of political expediency, it is something quite different if it is the result of naivety. Senior City figures who have (on too few occasions) met with ministers are at their wits’ end.

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Source

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Initially, politicians understood the importance of the City to the economy but refused to believe that bankers would up sticks and move to Frankfurt. (I mean, have you ever been to Frankfurt?)

More recently ministers, especially those in the Treasury, have begun to realise that it is a tiny bit more nuanced than that. Many of those ?who work in the City were born abroad and have been made to feel unwelcome by Theresa May’s attack on “citizens of nowhere”. Highly paid bankers also tend to go where the high pay is. And it’s not so much the people that will be moving from the UK to the EU as the jobs.

May's snap election

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Just when City lobbyists felt they were getting somewhere, May called a snap election.

This pressed the pause button on discussions and then threw all the pieces of government up in the air. Four out of five ministers in the Treasury either lost their seats or ?were moved out of the department; all of the ministers in the Brexit department, barring David Davis himself, have moved on for one reason or another.

The City has to start all over again explaining why, if it ends up being a “hard” Brexit, then there will be a whole load of stuff that used to be done out of London that will legally have to be done somewhere else. It’s a thankless enough task banging your head against a brick wall without being presented, some 22 months before the Article 50 deadline, with fresh brickwork.

There is potential cause for optimism in the EU’s recent moves on euro-clearing. These stopped short of the “land grab” that many in the City had feared and could set up a workable model for future cooperation on financial services.

But it is telling that the first move came from the other side of the channel. British politicians need to get their heads around what Brexit means for the City and soon. Otherwise the HMS Brexit will be holed below the waterline before it ?has even left port.

@mindhunter

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