After all the surreal events of recent months, it took one Sunday newspaper article to remove any lingering doubt that we have slipped into an Alice in Wonderland parallel universe where all the old ways are inverted.
To be precise, it wasn’t the British Bankers’ Association chief executive Anthony Browne’s warning that financial institutions are about to leave the City, that did it. The departure of the banks has been rumoured for a while. The proof that everything has been flipped upside down came via the emotional response to the prospect of a banking exodus in the new year.
Once, the reflex response to that would have been a yelped “Good riddance to the parasitic swine” (that’s the censored version, obviously) as an arm shot out in search of a bottle Moet and a funnel.
Not now. Even the White Queen, who told Alice she sometimes managed to believe six impossible things before breakfast, would have struggled to believe this before Brexit. But the involuntary hand movement induced by Browne’s doomy piece is to reach out instead for the hemlock.
This is due far more to instinct than any profound understanding of the financial implications, though we can all guess at some of those. I have a hunch, for example, that the flight of the bankers wouldn’t be a boon for London’s Lamborghini showrooms, or a butcher’s in the American-banker stronghold of Holland Park where you have to hand over the mortgage deeds as collateral for a 7lb rolled joint of sirloin.
Were all the damage from any banking diaspora confined to the luxury retail market, one might anticipate it with stoicism, even relish. Many of us would Uberize ourselves into a cut price fleet to ferry the bankers to the airport, bidding them farewell with a heartfelt “Hope the landing gear doesn’t get stuck, guys. Missing you already.”
But it wouldn’t be only, or primarily, the bespoke tailors, top-end wine dealers and Knightsbridge estate agents who felt the pain. The people who may safely be expected to suffer worst, by way of indecently perfect symmetry, are the same people who suffered worst after the catastrophic recession the bankers generously helped to bestow in 2008-09: the poor.
No major economy relies on financial services like Britain’s, where the sector provides almost a tenth of GDP, but about 30 per cent of all exports. To give that latter figure some context, the G7’s silver medallist in this discipline is the United States with barely 15 per cent.
Any shrinkage in GDP caused by the loss of the banks must affect state spending on such fripperies as the NHS, education and benefits. As the damage done to the capital radiated to the provinces, the fall-out would probably be at its most lethal in the most deprived and determinedly pro-Brexit areas. If the referendum was much more a vote against smug, wealthy London than against a remote and abstract Brussels, a diminished City and the effects of that would offer a peculiarly brutal tutorial about being careful what you wish for.
It is possible, of course, that Browne’s warning is at least in part a crude piece of posturing; an early negotiating position struck to scare the Government into softening the scope of its Brexit ambitions in order to safeguard London’s global pre-eminence as a financial centre.
Yet the notion of retaining free movement in one economic sector while abandoning it in all the others has no intellectual coherence. On what imaginable grounds would France and Germany, which have coveted the City’s dominance for decades on behalf of Paris and Frankfurt, agree to that?
Were all the damage from any banking diaspora confined to the luxury retail market, one might anticipate it with stoicism, even relish. Many of us would Uberize ourselves into a cut price fleet to ferry the bankers to the airport, bidding them farewell with a heartfelt “Hope the landing gear doesn’t get stuck, guys. Missing you already.”
But it wouldn’t be only, or primarily, the bespoke tailors, top-end wine dealers and Knightsbridge estate agents who felt the pain. The people who may safely be expected to suffer worst, by way of indecently perfect symmetry, are the same people who suffered worst after the catastrophic recession the bankers generously helped to bestow in 2008-09: the poor.
No major economy relies on financial services like Britain’s, where the sector provides almost a tenth of GDP, but about 30 per cent of all exports. To give that latter figure some context, the G7’s silver medallist in this discipline is the United States with barely 15 per cent.
Any shrinkage in GDP caused by the loss of the banks must affect state spending on such fripperies as the NHS, education and benefits. As the damage done to the capital radiated to the provinces, the fall-out would probably be at its most lethal in the most deprived and determinedly pro-Brexit areas. If the referendum was much more a vote against smug, wealthy London than against a remote and abstract Brussels, a diminished City and the effects of that would offer a peculiarly brutal tutorial about being careful what you wish for.
It is possible, of course, that Browne’s warning is at least in part a crude piece of posturing; an early negotiating position struck to scare the Government into softening the scope of its Brexit ambitions in order to safeguard London’s global pre-eminence as a financial centre. Yet the notion of retaining free movement in one economic sector while abandoning it in all the others has no intellectual coherence. On what imaginable grounds would France and Germany, which have coveted the City’s dominance for decades on behalf of Paris and Frankfurt, agree to that?