There's a hint of another dimension of the Brexit strife to come in the FT this morning. Reporting that relationships between the Treasury and Bank of England have become very strained because the Treasury wants the City to be as closely aligned to EU financial rules as possible post-Brexit and the Bank wants the freedom to do whatever it wants, it notes:
A number of officials have confirmed that Jon Cunliffe, the BoE's deputy governor for financial stability, has fallen out with the Treasury on the matter. One BoE official said: “The fear is that the Treasury is going to give it all away.” Another said: “It is very, very bad. The bank wants to have as much control as possible and doesn't want to be a rule taker.”
So let's be clear about this: the UK's state-within-a-state, otherwise known as the City of London, is using Brexit as a chance to say that it wants to go back to governing its own affairs without control from Westminster on behalf of the only people it thinks matter, who are those associated with the City.
No one should be surprised by this: it was ever thus. But the EU restrained 'two-state' Britain and helped keep the bankers under some degree of control. But not now they won't. And the bankers want to tun their own state again, with the rest of the UK being required to comply with its wishes.
This one is a real fight, with money behind it. The fear that some want to turn the UK into tax haven Britain post-Brexit has never quite gone away. This spat makes clear there is real reason for concern on this issue. And that's another reason to stay very close to Europe indeed.
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Remember; the City has the Remembrancer in the House of Commons (a sort of unelected member, representing City interests), sitting – I think – close to the Speaker’s Chair(?); a chastening reminder of who really counts.
Last I checked, the City were very keen to stay in the EU. I don’t see the City campaigning to govern it’s own affairs again either. I do see the Bank of England saying that they should be the regulator for the UK financial system – not the EU – after we leave it. Why should we take any rules from the EU, who have a habit of breaking their own ones when it suits them let alone the fact that they struggle to get a clean audit.
Nor did the EU do anything to stop the 2008 crash – they are now running around in circles post fact to try and regulate things.
I don’t see how the EU has anything to do with what you call the “two-state” Britain. They certainly didn’t to anything to restrain it as you say.
Your piece is just rhetoric really – the reality is quite different.
I give you the benefit of the doubt this once: this looks like right-wing trolling to me and next time I will delete
Since when has anyone controlled the city they have been free to do whatever they want since before 1066
I take your point Richard, and this certainly is a risk, but don’t forget that the EU that was on offer in the referendum was one that included a number of pro-City concessions that had been negotiated by David Cameron – which were, we were told, going to be incorporated into the treaties when they were next being formed.
Although the devil was always going to be in the detail I can’t imagine that these were ever going to offer more control than the (too weak) ones available at the moment. With recourse to the ECJ banks and corporations would always have the ability to hinder the actions of any truly progressive UK Government to do anything substantive to rein then in.
Add to that the clear benefit that the post-Brexit EU has a chance (should it wish to take it) to insulate itself from the malign effects of the City then, on balance, I think the risks you outline are ones worth taking.
That the UK will become a ‘rule taker’ is, to my mind, a benefit of leaving the EU – the evidence that ‘our’ influence in the making of these rules is ever beneficial is meagre to say the least. I’d much rather ‘we’ were rule-takers than compulsive rule-waterers anyday.