Concern for the UK’s banking industry has spread across the country, marking an awkward (but amusing) shift in sentiment among people who were previously keen to trash the sector.
Yesterday, the left-leaning Guardian newspaper splashed its front page on worries that “banks need urgent deal on EU to save jobs”, while last week one of the BBC’s most heavily covered stories reported a French regulator claiming banks were “in advanced stages of planning to shift some operations from London to Paris”.
The change in tone has precedents. The public image of maligned industries often benefits from the old adage that you don’t know what you’ve got till its gone. The pharmaceutical sector, for example, was public enemy No1 according to some campaigners in the not-too-distant past, yet as soon as Pfizer stormed across the Atlantic with its sights on Anglo-Swedish rival AstraZeneca, the UK-based firm seemingly transformed into a British scientific jewel, a crucial part of our economy at threat from a foreign corporate predator.
Nevertheless, Britain’s newly-discovered concern for its financial sector is valid and welcome. It is thus reassuring to see today’s report from the House of Lords EU Financial Affairs Sub-Committee – the basis of the Guardian’s story – offer clear and constructive advice to both Theresa May’s government and Brussels’ own negotiators.
The sub-committee echoes the view of other senior financial sector officials, such as Jon Cunliffe from the Bank of England, namely that it is impossible for the EU to take bites out of London’s financial sector for its own gain. “[Any] pain caused to the UK’s financial sector will not be the EU’s gain, but New York’s,” says Baroness Faulkner, recognising that services are unlikely to relocate en masse to other European cities. Furthermore, EU businesses reliant on London’s unique financial ecosystem would suffer if the City lost ground to rival centres in the US or Asia.
Faulkner explains the negotiations are not a zero-sum game. This point, which applies to all trade talks, should be obvious but unfortunately bears repeating, given the prevalence of nationalistic bartering. “We are in danger of a lose-lose scenario if pragmatism does not prevail,” she warns. Politicians on both sides of the Channel will be keen to depict themselves as tough and, ultimately, victorious, during the impending negotiations. The political reality in unavoidable, but beneath the bluster, officials must ensure mutual economic wellbeing is the ultimate goal for any Brexit deal.