Why is the City of London so supine before Brussels?
After the bail-out, the bale-out. Hedgies are not waiting around for Commissioner Barnier to send in the inspectors. They are putting their Chelsea pads on the market. They are eyeing up penthouses in Manhattan, villas in Geneva, mansions in Singapore.
It’s not any single measure that’s pushing them abroad: not the AIFM directive, nor the 50 pence tax rate, nor the curbs on bonuses, nor the stitch-up that has left the French and their auxiliaries in charge of EU banking and investment. Rather, it’s the general trend: the sense that the invigilation of financial services will be permanently shifted from the UK to the EU.
Not for the first time, I have been struck by the way Europe sets the top brass against the poor bloody infantry. The board members of some of our biggest institutions are terrifyingly complacent; their Brussels lobbyists even more so. But rank-and-file City workers know exactly what Euro-supervision will mean, and are making plans to relocate.
Why are their bosses being so supine? Because, at heart, they’ve given up. They don’t believe the process can be stopped. As long as we’re in the EU, they say, we must play by the rules. If those rules mean that private equity is driven out of London, tant pis.
But chaps, don’t you see that you’re begging the question? What is the point of being in the EU if it is so deleterious to our prosperity? Wasn’t the Europhile argument that, whatever the loss of sovereignty, we needed to be part of a single market? If it now turns out that that the EU is destroying the only sector of our economy with the locomotive power to drag us back to growth, shouldn't we consider the alternatives?
Let the Continentals be as dirigiste as they like. Let them rail against the “locusts” of private finance; let them outlaw bonuses; let them buy government stakes in private firms; let them have prices and incomes policies. And let Britain become as Taiwan to their Red China: a competitive, low-tax, off-shore haven.
Seven million Swiss, relying on a series of bilateral free trade agreements, have done precisely this and have become, in consequence, the wealthiest people in Europe (see here). Couldn't 60 million Britons do something similar? We are a nation of seamen and explorers, of merchants and traders, of adventurers and colonists. We are linked to every corner of the world by our language and laws. And, for what it's worth, we are running a trade surplus with every continent on Earth except Europe. The City must think globally. If we tie London to a shrinking, over-regulated, ageing and sclerotic regional bloc, we are finished.
So long and thanks for all the clicks
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