The true costs of Brexit to the financial sector are still unspoken

What narked me throughout the Brexit Referendum campaign was the consistent denial of a proper discussion and examination of what was being proposed. It still does.

The obfuscation that we heard since Cameron left the scene was not accidental. The government refused to let us know Treasury assessments of the implications of Brexit and it still refuses to. Jacob Rees-Mogg, the Leader of the House, blocked an extension of the Parliamentary Commons Committee on the Future Relationship with the European Union beyond 16 January 2021. The Committee had been tasked with scrutinising the Brexit process.

It is not as if everything is now settled and running perfectly. Why should the public get to know anything? Many Conservative MPs are noisy in their objection to the lockdown but seem strangely unconcerned about our future relationship with the EU.

During the campaign I was particularly enraged by Michael Gove’s,’ I think the people of this country have had enough of experts…..’. I thought then, and I still think, that experts are exactly what you need to help you reach decisions on matters about which there can be no absolute certainty. When you or your family face surgery or fly on holiday experts are what you rely on. I dare say Mr Gove does too.

For three hundred years the Governor of the Bank of England has always been a person of substance. The Bank has complex duties and interactions with other organisations nationally and internationally. In 1998 it became wholly owned by the Treasury Solicitor on behalf of the government, but with independence in setting monetary policy. It is tasked with maintaining monetary stability and it interests itself in the pursuit of stable prices and confidence in the currency. The Governor is also Chairman of the Monetary Policy Committee, with a major role in guiding national economic and monetary policy and is therefore one of the most important public officials in the United Kingdom as Wikipedia notes.

In 2012 Mark Carney was appointed Governor by the then Chancellor George Osborne without much public consultation. Previously Mr Carney had been Governor of the Canadian Central Bank and it  seemed that he had been effective and respected. I believe that he was generally thought to have done a good job for us and he was certainly no government cat’s paw. He didn’t claim to know everything but he fitted with most people’s opinion of what an expert is.

Andrew Bailey had been Chief Cashier of the Bank of England from 2004 to 2011; chief executive of the new Prudential Regulation Authority and the First Deputy Governor of the Bank of England for Prudential Regulation 2013-2016; and Chief Executive of the Financial Conduct Authority 2016 to2020. In my opinion the Financial Conduct Authority has not been a very impressive organisation. In March 2020 the Treasury select committee criticised its performance.

On 16 March 2020 Mr Bailey was appointed without much public consultation Governor of the Bank of England by the then Chancellor Sajid Javid. A difficult time as the UK was about to cease being a voting member of the EU and to enter the transition period.

On 30 December 2020 the UK signed a Treaty with the EU governing our relationship from 1 January 2021. This treaty was not just a trade deal. Until then (and even for a few days after) the public had been given little idea about the details. Despite it being obvious that the Covid-19 pandemic would impair the government’s ability to concentrate on the details of the treaty, the government declined to take up an offer to extend the transition period: an extension could have given the UK more time to think about the implications of the treaty and to allow those directly affected by its terms to make preparations and representations. Even though the financial services sector is by far our largest when it comes to international business, the treaty did not include anything much about it beyond an optimistic sentence or two about future hopes. This negligence Is bewildering though observation of the government’s performance means that it is less surprising than it should be.

On 11 February 2021 the BBC News Website reported that ‘Amsterdam ousted London as the largest financial trading centre in Europe last month as Brexit-related changes to finance rules came into force: €9.2bn worth of shares each day, against €8.6bn’.

Mr Bailey said that there were signs that the EU planned to cut the UK off from its financial markets as it does not recognise UK exchanges as having the same levels of supervisory status as its counterparts in the Netherlands, France and Germany. He reported that both sides are working towards a March deadline to agree an “equivalence” regime under which each would recognise the other’s regulation. Mr Bailey assured us that he would not accept being “dictated” to by Brussels and that EU demands had so far been unreasonable, in effect making the City a “rule taker”.

In my opinion this is exactly what giving up your EU vote means. But Mr Bailey’s comment given to a Parliamentary committee makes him sound like just another Brexit apologist (they are two a penny in our government) seeking to hide the falsehoods the public have been fed.

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