Jonathan Fryer

Posts Tagged ‘City of London’

The City in Europe

Posted by jonathanfryer on Monday, 9th September, 2013

Vince CableVicky PryceGisela Stuart 1Jesse NormanA referendum on Britain’s membership of the European Union isn’t expected until 2017, and may not happen then, but the arguments for both In and Out are getting more insistent. This evening, the magnificent Great Hall at the Guildhall in the City of London hosted a capacity crowd to hear a debate on the question “The City in Europe: Will the Square Mile Prosper if Britain Leaves the EU?”, organised by the Evening Standard newspaper and moderated by Jon Sopel of the BBC. The Lord Mayor of London, Roger Gifford, left no doubts as to where his sympathies lay when in his introductory remarks he stressed London’s importance as a centre for financial and other services and how some banks and firms in the City would pack up and leave if the UK withdrew from the EU. The Business Secretary, Vince Cable, pursued the same theme in one of the most pro-EU speeches I have heard him make; unlike many Liberal Democrats Vince does not have a particularly strong emotional attachment to anywhere on the continent; if any one country is close to his heart it is India. Nonetheless, he argued that EU membership is crucial for Britain’s economy and jobs. The UK is the third largest recipient of direct foreign investment (after China and the USA) and many of those investments are linked to Britain’s position in the EU. Gisela Stuart is unusual in being a Labour Eurosceptic (and MP for Birmingham Edgbaston), despite being born in what was then West Germany; but her line was indeed Eurosceptic rather than Europhobe. She felt that if some powers were repatriated (as David Cameron hopes) and the Eurozone’s economy picked up well then the British public might be likely to vote to stay in the EU. Jesse Norman, the Conservative MP for Hereford and South Herefordshire (just sacked by David Cameron for voting against the recent Government motion on Syria) took a different approach, answering the question of the debate directly by asserting that the City was strong enough to withstand the effects of Britain joining the EU. He was coy about whether he would vote Out now, but mildly optimistic that the Government will win some concessions in a renegotiation. Vicky Pryce, the Greek economist (and LibDem member) also thought that there might be some repatriation of powers, mainly because several other member states were thinking along similar lines. But she, of course, believes strongly Britain should stay a member. Had I had the opportunity to put a question to the panel, I would have reminded them of Herman Van Rompuy’s remark about people not winning arguments in a meeting if they have their coat on and one hand on the door — and I would have asked them whether the City might not benefit if David Cameron heeded that advice.

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Why the City Needs EU Membership

Posted by jonathanfryer on Thursday, 18th July, 2013

Excellent piece on why London’s financial centre needs to be part of the European common market, by my friend Mark Field, Conservative MP for the Cities of London and Westminster. I wish more of his Tory colleagues thought the same way!

The City is one of Britain’s most valuable assets and central to its success is its ability to be part of the EU’s common market. The coalition government’s EU policy must be based on those two fundamental principles.

Mark FieldHistorically there have tended to be two potential models for a successful financial centre. The first, an onshore version, is based around the notion of a hub city servicing a sizeable domestic market – think New York and the US market. The alternative approach, offshore, depends upon attracting business primarily via competitive tax rates, regulatory arbitrage and other distinct selling points such as a respected system of law, privacy and a skilled workforce – the most obvious example here being the Swiss niche in secret bank accounts. Until 2008’s financial crisis, the City of London had pragmatically been enjoying elements of both models and benefited handsomely. Prominent first as the epicentre of the British Empire, servicing the UK’s great global trading market, since the 1980s the City had taken on the role of offshore-onshore financial centre to the European continent – more recently still as a member of the European Union outside the Eurozone. As a pan-European capital market, the City flourished and alongside that role was able to take advantage of a light-touch regulatory approach advocated by Britain and applied across the EU that attracted huge volumes of foreign money. But the arrival of the financial crisis fundamentally changed the rules of this game. Almost overnight since 2008 the EU has demanded greater oversight of its financial infrastructure. Awkward questions have been raised about the ability of London and UK financial services regulators to prevent the system silting up; whether it is sustainable (or desirable) for Euro-denominated risk to be cleared offshore in the British capital. In turn, the City has expressed firm concerns about the way the new and numerous EU laws can fundamentally damage its global competitiveness.

The invoking of a British ‘veto’ at the December 2011 EU summit was billed as an aggressive demonstration of the UK’s intention to retain its offshore/onshore model, protecting the City as its vital interest. To much of the EU it was perceived as an unrealistic and petulant attempt to maintain an unsustainable status quo. The UK’s demands for safeguards would have given the UK an effective veto over European financial regulation, a request that was never going to be acceded to. In reality, that veto was less about the future of the City and more a political gesture to a domestic audience aimed at keeping Eurosceptic wolves from the door. The backdrop to that summit, it is important to recall, was the unexpectedly large ‘rebellion’ in support of an EU referendum. It was perhaps naïve ever to suppose that this would close off debate on the issue. Instead the Prime Minister’s superficially popular move delighted the media and hardened Eurosceptics’ resolve to extract further concessions. Since then, of course, matters have moved on apace. The EU, under the leadership of European Internal Market Commissioner, Michel Barnier, has set up a single bank supervisor and is moving ahead with putting in place the foundations of a banking union. Meanwhile the coalition government saw further rebellion on the UK’s relationship with the Union, that time over its budget, and the Prime Minister has crafted a clear path towards renegotiating the UK’s relationship with the EU, returning powers and holding a referendum.

City of LondonThe uncomfortable truth facing the Prime Minister is that there is no third way in the UK’s relationship with Europe. His understandable instinct is to play for time, trying to address Eurosceptic passions with aggressive talk about repatriating powers from and renegotiating our relationship with the EU, while smoothing relations with European partners behind closed doors. To some extent, this is a challenge faced by all European leaders, whose electorates are increasingly restless at the influence of the EU institutions. This approach is, however, no substitute for a clear view about how Britain’s economic interests are best served, particularly when it comes to the direction in which the City – the nation’s only substantial, globally competitive industry – should evolve. Our European partners are entangled in a crisis of continental scale and have lost interest in being lectured to accede to the UK’s demands.

If the Prime Minister sees our future in the EU, with the City remaining closely integrated into the vast domestic European market, a more collaborative approach with our European partners is required. This path will involve facing down Eurosceptic sentiment in the UK. He must put forward a powerful case for why now is not the time for British belligerence. Time will need to be spent extracting the best deal for the City through careful diplomacy and the building of alliances. Talk of fundamental renegotiation is illusory. Many of my Conservative colleagues, whose idea of renegotiation would take the UK’s relationship with the EU back to a pre-Maastricht arrangement may not like it, but for the EU and the City the choice ahead is increasingly binary. This arises out of a dearth of strategic thinking in how we see the City operating in future and the relationship Britain should enjoy with the European Union in the years ahead. The long term success of the City is better served from within the EU, forming the laws that affect it and helping shape the EU’s future. Because a successful City and an engaged UK are good for the EU as a whole.

This article first appeared on the European Movement’s euroblog. Link: http://www.euromove.org.uk 

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Boris Is a Barnacle

Posted by jonathanfryer on Friday, 18th January, 2013

barnacleBoris Johnson 4Any formal function at the Mansion House in London is normally the Lord Mayor’s show, but the annual London Government dinner — always held in early January — offers the incumbent Lord Mayor  a challenge, as he is inevitably playing second fiddle to the Mayor of London, i.e. the man in charge of the whole city rather than just the City (financial district). The current Lord Mayor, Alderman Roger Gifford, acquitted himself far better than most, being skilfull in both cadence and content. That is no mean feat when one has the blond bombshell, Boris Johnson, to follow. What Boris had to say was hardly a surprise, as it had been extensively previewed in a leaked story to the Evening Standard. Basically, he was arguing that Britain should stay in the European Union — a rare bit of supportiveness for Prime Minister David Cameron, who is due to make what is billed as a “landmark speech” on Britain and Europe in the Netherlands tomorrow (how pleased he must be to be pre-empted by Boris) — but that we need to scrape the barnacles from the ship of Europe that are slowing us down. This is, frankly, bollocks, and I was pleased to see that many of the City figures predictably present on this occasion had their heads in their hands as Boris rambled genially on. It is simply not true, as Boris asserted., that the great outside world is just waiting for a dynamic Britain to go it alone, or at least situate itself in some far looser arrangement with our continental partners. As the Americans made abundantly clear the other day, they are interested in the UK precisely because it is a gateway to Europe. Close that door and we risk becoming an irrelevance. Of course Boris can be witty, and raise a laugh. But it was self-evident tonight at the Mansion House that he struck completely the wrong note. The City knows full well that it needs a prosperous Britain within a prosperous EU. And it is about time more City types stood up to be counted on the issue — and to blow Barnacle Boris a giant raspberry.

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Lord Mayor of London’s Warning to Euro-sceptic Tories

Posted by jonathanfryer on Tuesday, 17th November, 2009

‘Scepticism about Europe — or even disengagement — is yesterday’s game,’ the Lord Mayor of London declared last night at his banquet speech at the Guildhall in the heart of the City of London, the financial district. ‘We need to be at the table shaping the future or others will,’ he added. His remarks, which were a scarcely veiled attack on David Cameron’s Conservatives and their persistent Euro-scepticism, was warmly applauded by the City figures present, many of whom would normally be natural Tories, but who are horrified at the way an incoming Conservative government might further distance Britain from the European mainstream. That could have a catastrophic effect on jobs and investment in London, as well as giving a boost to rival financial and business centres on the continent. Labour was not spared some of the Lord Mayor’s advice either, as he urged the Goverment to engage more enthusiastically with Brussels, to stop European rivals from choking off the City. But with the wind apparently blowing into the Tories’ sails in the run-up to the general election, we can be sure that it will be David Cameron’s office that will get more heavily lobbied by the City. And quite right too!

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