I was invited to take part in a discussion in the City of London yesterday. This is not a particularly unusual event, but the combination of people brought together on this occasion was extremely diverse. The whole thing was done on a Chatham House basis which means that names will not be mentioned but the views expressed can be.
It Is fair to say that a slight majority of those present had voted leave two weeks ago which is not in all likelihood representative of the City as a whole, and all the opinions offered were personal. Most of those present were involved in financial trading of some sort; two were economists and one was a journalist from a newspaper that I will not name.
The Remain View
I have to be honest, the Remain camp were the quieter of the two present.
We were, broadly, pessimistic.
We hoped that Theresa May would become prime minister and we presumed, although we did not know it at the time that Andrea Leadsom would be her opponent, and were pretty gloomy at the prospect, largely because we could not see how she could command her party. Given that it has a tiny majority there was some debate as to what this might mean for Brexit negotiations.
What worried those of us in the Remain camp most of all was, perhaps, the chance that Leadsom might be Chancellor.
We recognised Leadsom could win: the make up of the cabinet in that case seemed to be a clear cause of concern to Remainers.
I think those in the Remain camp thought that the chance of austerity surviving as a policy was low: I am not too sure that this was true of the leave camp.
Those in the Remain camp also thought there was a very high chance that Article 50 might never be invoked: unsurprisingly those in the Leave camp did not agree.
Everyone agreed that George Osborne has no chance of surviving as Chancellor.
The Remain camp seemed to conclude that Theresa May's most likely choice of Chancellor was Sajid Javid.
The Remain debate participants (or was it just me?) were worried about the inability of any Conservative government to deliver for the vast majority of the people who had voted Leave. This did not appear to be a matter of concern to the Leavers.
The Remain camp were very clear that they saw the Leave vote as a rejection of the impact of globalisation. The Leave camp did not do so: their reason to say that was it had not been described as such on doorsteps and therefore it could not be true. We pointed out that many of the reasons given could be seen as proxies for this one real cause: I do not think that was agreed, at all.
Who do Leave want as PM?
Leadsom. There was no doubt about this: their assessment of May was blunt and none too polite.
How low did the Leave camp want the pound to go?
One present said he had no concern at all about how low the pound went: he thought the lower the better as that meant there was more of the UK that he could sell and this was the only issue he was concerned about.
Will we have a property crisis?
The Remain camp were worried: the Leave camp did not seem to be so.
As far as the Leave camp were concerned high value London property was now more attractive: money from high net worth individuals would continue to flow into London now that property was relatively cheaper and that was all that mattered.
What sectors will drive growth?
This was only discussed in context of Leave and the change in the value of the pound. The car industry was seen as an engine for growth because UK manufacturing was now cheap. It was thought that manufacturers would now push up wages by the Leave camp because some of the devaluation would be taken to profit and wage returns: I doubt this.
There was very little agreement on the impact on retailing or inflation. Amongst Leavers growth seem to be almost inconsequential: the ability to arbitrage is key.
Taxes
The Leave camp were encouraged by the UK being a tax haven.
Summary
There was sanity present. It was not well heard. The Leavers really do think they have carte blanche to exploit this situation for their own gains. It was pretty depressing.
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There seems to be an almost quasi-religious element to the views held by many Leavers; I believe this will carry their cause for a time. In this situation, when these beliefs don’t materialise the tendency is to hold on to the belief and find alternative explanation as to why they weren’t realised.
What really worried me was their utter inability to think beyond money
One said ‘that’s all it’s about’
Their inability to think beyond money also chimes with what you said about them refusing to recognise that deleterious effects of (neoliberal)globalisation influenced the leave vote. Many on the right have such a primitive understanding of causation and humanity it’s no wonder theoir policies are so destructive socially.
Absolutely no surprise to me that almost everyone who is a “serious player” in the City of London has an “utter inability to think beyond money”.
That is their raison d’être under private financial capitalism – why would you expect anything else?
Well that cheered me up … not! Your conclusive summary has confirmed in my mind that it’s not even going to be a case of ‘more of the same’ but possibly significantly worse. As I have previously mentioned both May & Leadsom are toxic. That we have come to this point in history when the choice for Prime Minister is between two people so clearly unqualified and unsuited for the job is deeply depressing. It wouldn’t be so bad if one thought there was any chance of an effective opposition to unseat the government. As you say, its majority is minimal. On reflection the state of the Labour Party is possibly even more depressing. Maybe we’re entering a Second Dark Ages. I’m really concerned for the young. But, nothing is permanent. One just has to keep chipping away until the rotten tree falls. Happy Friday!
“Given that it has a tiny majority” & there hangs a tale. At the risk of sounding like a broken record: on-going police investigations into Tory election over spending in 20+ marginals points to a possible “sell-by” date for this gov, but, no election – because I doubt they could muster the 60% in the HoC.
“The car industry (i.e. the Japanese car industry) was seen as an engine for growth because UK manufacturing was now cheap”. Zero possibility of this & I speak with 1st hand knowledge. The reverse will happen.
I found the claims made bizarre
Has UK engine making really sky rocketed?
And do most now go into UK assembled cars?
I don’t see it…
Anyone know?
Maybe I’m missing something but won’t engines need raw materials?
Whose price will go up as the £ goes down?
So how are we much more competitive?
I can understand that home-grown things will be much more competitive but anyone that thinks we can survive on selling Stilton, Cider, Whisky & Beef is frankly delusional.
No wonder Ken Clarke (who thinks Stilton, Cider, Whisky & Beef is a damn good breakfast) seems so elated these days. He knows Brexit cut their own throats
Details, dear boy, details
Or something like that, I suspect
In that case, many of us ‘Remainers’ commenting on this blog were correct.
I’ve read about Leadsom. I am very worried. We do not need a leader who will follow the financial industry to the detriment of the country. That will be the equivalent of a coup – a very British one – if Leadsom wins.
We need someone who will try to balance the country and calm things down and although I really don’t like the Tories, May is the best chance of that happening.
I have to say however that in my view, where there is a change of Leader in the ruling party, there must also be a general election. If such a rule existed, Cameron may never have agreed to be so stupid in the first place and it would also cut off a source of potential political instability and crises.
As for your experience in the City, the overwhelming impression I get is that these people love chaos because it creates opportunities that the huge amounts of money they have affords them. It is totally undemocratic and you (we) have every right to feel a bit depressed.
I think that your suggestion about chaos is entirely justified
I quite agree – after many years working with City clients off and on, those with the real power in the City like volatility as it offers the most opportunity for arbitrage and short term trading. That the rest of the economy and society prefers stability and suffers from that volatility is of no interest to them. No surprise to find they prefer Leadsom with her background
Precisely why tackling the City is so important. And also one small reason why the EU might be glad to be shot of England so it can introduce legislation on tax avoidance and possibly a financial transactions tax to dampen high frequency/volume trading
Putting the economics to one side (bit cheeky on a blog like this I know, sorry) I’m worried about the far right.
The far right know that millions of people voted for Brexit because of immigration and because they believed (naively imho) that voting for Brexit really would mean if not an end to immigration then a significant reduction.
The far right also know that, like the ‘£350 million per week to Brussels’, and rhetoric about ‘funding our NHS instead’ and ‘sovereignty’, Brexit had no plan and would not deliver.
The embarrassing back-peddling we saw from Brexit politicians following the Referendum demonstrates that the far right were correct – especially about immigration.
The far right are now biding their time, they know millions of people are going to be very angry when they realize what they heard and read from the Brexit narrative isn’t actually going to happen.
Lots and lots and lots of Brexit voters are going to be feeling betrayed and angry about immigration and being taken for mugs by Brexit politicians: Gove, Boris, Farage, IDS and the rest of those chancers.
And the far right will be there, to welcome them with open arms.
This issue was utterly dismissed
I was told I was quite irresponsible to consider the possibility of social unrest
Or whatever happens let’s not plan for it
Which is why Jeremy Corbyn needs to persuade working class brexiters that under his leadership Labour will do everything it can to represent their interests in a UK outside the EU.
His backstory as an EU sceptic will give that approach credibility.
Freedom to nationalise the railways, block welfare cuts, escape the TTIP, increase the amount of public money to be spent on a fully nationalised National Health Service, implement a large-scale public housing program, terminate PFI contracts, protect workers’ rights, abolish tuition fees, introduce rent controls in unaffordable areas, abolish the bedroom tax, and reverse austerity for the benefit of ordinary people will be a huge vote winner, and completely undermine the siren call of UKIP.
The distressed and disenfranchised will only turn to the Right if and when they realise they are offered nothing by the Left.
It’s not too late…
No one is writing this policy….
I back Mr Shigemitsu’s call on this and as far I can tell the only parts of this policy that haven’t been written (or at least floated) are those relating to the bedroom tax, rent controls and abolishing PFI’s.
Even there it would seem that Corbyn, McDonnell et al are opposed to new PFI’s even if they are not committed to the vexed task of abolishing all the existing ones.
“The distressed and disenfranchised will only turn to the Right if and when they realise they are offered nothing by the Left.”
is a comforting narrative &, like all such, entirely bogus.
Even assuming Corbyn could somehow climb back on the broken-backed wheezing nag that is the PLP he won’t get it to gallop in his direction. If Corbyn is unseated who do you think is going to?
In any case, the best Labour leader still probably wouldn’t be good enough. In my experience if you offer people 2 choices, one simple & one complex, they take simple.
For the Right its very simple “THEY caused this”, “THEY” being those that aren’t like us.
Bizarrely, the THEY can encompass bankers in EC1 as well as Polish builders, Filipino nurses, Syrian asylum seekers & Somalian taxi drivers.
Which makes it difficult to argue against.
Is there a way out? I don’t think so. I’ve told my boys they must start learning German &, ideally, Cantonese/Mandarin.
We’re finished.
There are 2 ways we go from here. The best way is we end up desperate, poverty-stricken & hopeless, but still civilised, like Argentina.
The worst way is we have our own Hitler
The positive view of Mr. Shigemitsu and the fatalism of Eriugenus represent the poles of thinking on this. At the moment I incline towards the more positive side. However, eriugenus makes good points:
1) over simplistic arguments like ‘there is no money’ and ‘it’s those foreigners’ are effective because they are repeated ad nauseam and we have a stressed, tired populace that will be inclined towards knee jerk anger. Neo-liberalism likes treating people like shit and using them as puppets.
2) To get ac cross a new economic paradigm will take time and an educational effort that requires engagement. With a populalce stressed to ****, dumbed down by crap TV and bum-wipe media for nearly 40 years, this engagement will be a tall order.
3) People might not accept that they have been conned and taken for a ride for so long and thus not accept that, in reality, there can be no shortage of money and that money comes from nowhere.
However, we have to try-learning German and Cantonese, although interesting, might not help as those countries are part of the global debt fiasco. Better to work towards policies that challenge the beggar thy neighbour ideology.
We have Hitler now: It’s called finance capitalism and it has already destroyed democracy created deaths/suicides/hopelessness/despair and monetised the planet to death and destruction….that future is NOW.
Maybe JCB will lead the way with the manufacturing wage increases.
Interesting about not worrying how low the pound will go. Of course will benefit manufacturers competing on price. But presumably a lot of high end economic activity eg. finance, corporate law, consultancy isn’t particularly price sensitive.
Mrs Leadsom wishes to hold a vote on fox hunting, hoping no doubt for a repeal. That she calls foxes vermin and not foxes is very telling.
This subject is so important to the Tories. Guardians of the countryside, never mind diversity, more grouse needed I say.
‘she calls foxes vermin ‘ This must be a classic projection because we all know:
“”So far as I am concerned they are lower than vermin, They condemned millions of people to semi-starvation. I warn you young men and women, do not listen to what they are saying, do not listen to the seductions of Lord Woolton. They have not changed, or if they have they are slightly worse.”
‘The Remain camp were very clear that they saw the Leave vote as a rejection of the impact of globalisation. The Leave camp did not do so: their reason to say that was it had not been described as such on doorsteps’
This is evidence of gross psychological superficiality and a level of literal interpretation that is alarming. It also involves a complete misinterpretation of the historical moment that most of the establishment is making.
It is true that due to the depoliticisation of politics, the message about globalisation was not conveyed partly due to a grossly inept Labour Party that can’t communicate itself out of a paper bag. But that does not mean that the impact of globalisation and internal devaluation was not FELT, it was just that this feeling was steered in the wrong direction to deliberate ascribed the wrong causes.
Those people you were talking to live in cloud-cukoo-land by the sound of it, not surprising as they spend most of their time shuffling wealth around whilst making either a negative or zero contribution to society.
The sole advantage of having Leadsom as PM would that she would be far more likely to lose the next election. As a leader, everything about her seems to be tailor made for the purpose of losing. Apart from her character, politics and banking background she has a history that is (fairly or unfairly) suited to scandal stories. In fact, they have started already, this is just one (the others – in the Sun, Mirror and Daily Mail) were less informative.
“Leadsom forced to account for financial history
Tory contender has denied any attempt at tax evasion as focus sharpens on her past”
https://next.ft.com/content/89ff6b1e-4204-11e6-b22f-79eb4891c97d
The only other things that she seems to be particularly famous for are being pro- fox hunting, anti-gay marriage and this:
‘Leadsom urged the government to take a very different approach to workers rights’ for companies with three or fewer employees
She said: “I could envisage a situation where you had no regulation whatsoever, no minimum wage, no maternity or paternity rights, no unfair dismissal rights, and no pension rights – absolutely no regulation whatsoever for the very smallest companies that are trying to get off the ground.” ‘
http://www.bbc.com/news/uk-politics-36744449
The most astonishing thing about the pro-Brexit side of the City view in this case is that it either:
A. Seems think that the fall in the value of the Pound will be permanent (at something like current levels)
OR
B. Seems to be entirely focused on the short-term gains that can be made from a temporary devaluation.
The idea of a significant and permanent devaluation may have been justified if Britain were a peripheral member exiting the Eurozone. It isn’t. If anything the fall in value will be largely corrected through arbitrage and opportunist trades being made by the very people who are celebrating this short-lived opportunity.
Then what? – After that they will find that, in their financial world, a stronger currency is (for the most part) advantageous – and if it does not fully (fully) recover value, which it may not, it looks like a case of: sucked in loser, be careful what you wish for.
Are these people incapable of seeing any further than the end of next month?