According to the FT this morning the UK might agree to pay billions a year to keep the City of London, but not the rest of the UK in the EU Single Market.
Three thoughts. First, as ever the City proves itself a state within a state. But in that case, why not separate deals as well for Scotland and Northern Ireland who also voted to Remain?
Second, who pays for this? And how? There is no way the City should receive a UK wide subsidy.
Third, why the City alone when it is the one part of the economy that needs to shrink if any form of rebalancing is to take place?
Bluntly, the City's self interest and financial power apart, is there any logic at all to this suggestion?
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Because the City funds the Conservative party & the City wishes to take back control. I particularly like the sentence “we would have to be careful how we explained it”. Other news I heard on the BBC local radio this morning is that troops are training with the police near Salisbury for civil emergencies etc. Interesting times.
The emergence of any such deal would allow other geographical areas (not just Sunderland), to propose similar deals via their local authorites and (from the EU’s viewpoint under the current EU principle of subsidiarity in Article 1 of Lisbon), thyss chipping away at the whole, to the point where Brexit was impossible.
One legal route to this, potentially desirable by both central government and local government as a face-saving measure couched in terms of devolution, would be the Sustainable Communities Act 2007, which allows local areas to seek greater powers in the interests of the sustainability of their local communities.
I have written up the possibilities here https://t.co/Wpj9Z6TOdH
Thanks
Is this the same as what David Edwards called the “Flanders option”? As I understand it that involves subnational bodies with devolved powers to exercise those same powers in relation to EU matters independently of national govt.
The scottish govt appears to be considering that as an option, and it is said to be possible because Flanders already does this. However we are a very centralised state and it is inconceivable to me that WM will cede such rights under any circumstances. Direction of travel is more centralisation under the rhetoric of localism, and has been for years, so far as I can tell. Ms May in particular seems to me to be a very centralising politician and the hardest of hard brexiteers.
Thoughts?
So far only blame has been decentralised
There is a logic to it, from the World view of a London banker and any politician or public relations agent financially dependent on him.
And that’s it. All of it. There is no other logical view of it.
Viewed from Paris, the commercial and political logic points to all the markets moving to Paris and all the money going to French banks.
Viewed from Berlin – and every other Northern European capital except Dublin – the logic of national and Community supranational interest points to orderly and well-regulated markets in Frankfurt and an end to wholesale tax evasion. (This logic has a flaw: an overoptimistic view of German regulatory competence).
Viewed from New York, this makes sense if, and only if, the UK government subsidises it out of UK taxes instead of a City Levy. Maybe not all of it, but enough of it to ensure that there’s no economic benefit to Bulge Bracket banks moving out of London.
I do not doubt that other commentators will find further flaws in the logic of the pay-to-play proposal, and compelling reasons for the banks to stay or go on their own dime.
However, the political logic – if I may use such a tautology in these times – is worrying: I do not believe that the May Government respond to external influence. Not Parliament, not legal advice, not the Civil Service, nor even opinion polls with the ‘wrong’ result. Not even City Money. They are entirely inward-looking and they only listen to each others increasingly delusional views.
I can think of worse things than a government listening to the warped economic logic of a London Banker; and I can easily imagine a government doing them without thinking of the consequences.
Or worse: reveling in the consequences and the adulation of the far, far Right of the media and their supporters.
Feel free to disagree with that, but take a look at May’s record at the Home Office and the economic damage that she did there – and her protegé continues to do.
I think the idea that they only listen to each other is interesting
And may well be true
The phrase ‘bunker mentality’ is unhelpful, but “They only listen to what they want to hear” isn’t quite there.
‘Inward-looking’ works quite well: true, but not expressive enough.
The most nuanced view is to consider the previous administration’s blind spot on foreign policy: they didn’t have any – ‘foreign’ existed only insofar as it reflected or cast shadows into domestic politics. Now consider that blind spot expanding to encompass the whole of the sky; or, better still, examine each an every action and inaction through the filter “Is this in the blind spot, too?”
I can’t read the article but noticed the headline. Your questions are also some of mine.
What is the mechanism for this? We are told Scotland and NI cannot have a special arrangement of any sort, though there are ways that could be done. Is their precedent for a corporate sector getting this but not a country? Is it a matter of govt paying any tariff which might be imposed, and is that the same as for Nissan? Since, in another part of the forest, the claim is there is no money how can that work?
Is the EU amenable to fundamentally altering its basic rules in favour of financial sector so no money required ( which is quite possible given the EU is also under the influence of banks and financial sector, if less so than UK govt)
Or what is it that is actually proposed?
I suspect this is just more pretense that there are options to negotiate which are not in fact open. But I am interested in the substance, since as you say, it makes no sense in any terms I can understand without more detail
It may, as you say, all be a red herring
But remember it’s not the Walloon option – because this is outside the EU
Plainly this is a fix to benefit the financial industry and no doubt their very rich clients aimed at keeping things stable between them during and after BREXIT whilst the rest of the real economy fights over the bones of what’s left.
You have to admire how the financial types stick together.
Another logical reason maybe that the EU can still get the output from the City recorded in the Eurozone – beefing up or supporting the overall economic performance figures for the EU? I’m thinking about the gross flows of investment capital/profits between actors in the City and the EU here but I am no expert.
The hypocrisy of the conservative party claiming to now want “A country that works for everyone” is laid bare. Central to the anger the drove the Brexit vote was 8 years of declining prosperity for UK workers after the 2008 banking crisis, whilst the bankers who caused it have prospered. To suggest that the UK should now remove itself from the benefits of the single market, whilst cutting a special deal for the city of London to stay in, paid for by UK tax payers, is quite frankly outrageous. If only we had a proper opposition to expose this bunch of charlatans !
Surely this would be such a fundamental variation to the way that the EU functions that it would amount to treaty change. That can not be agreed under the qualified majority process contained within Article 50.
As we would be a third party it would be interesting to see how this peculiar arrangement could be applied to us but not to New York or Singapore.
It seems like wishful thinking on the part of the Government rather than a viable proposal.
Maybe
But their wishful thinking has to be taken seriously
It’s worth bearing in mind the fact that the Queen and her ministers require the permission of the Lord Mayor of London to enter the City of London itself. I suspect that fact has Constitutional implications; I don’t know whether the PM can exercise the Royal Prerogative when it comes to something as fundamental as this in the City itself.
The 360,000 people who commute into the City each day have many different kinds of jobs; some of them are lawyers. The vast majority of the people employed here are not the stereotypical ‘fat cats’, who will, in any case find equally highly paid jobs elsewhere; they are the people who will lose their jobs, or work for much lower wages. We have already seen construction job losses here; all over the city worksites are slowing down or mothballed. Commentators have finally noticed this, and the sector is now ‘officially’ in recession, as opposed to the recession I’ve been watching for the last 3 months and talked about to anyone who will listen.
I suspect that it is the potential loss of tax income which has concentrated Mrs May’s mind; the alternative being put forward by what Ken Clarke calls the headbangers is to turn the City into a money launderer cum tax haven so it’s not surprising that the City is unenthused. I’m not either.