Where is our patriotism for British financial services?

The City could do with some of our Olympic spirit.

Whilst Team GB excels and its athletes epitomise the best of Britain and continue to be a shining example of the rewards achievable through dedication, honest hard work and, passion; many aspects of the City continue to shame us.  Having said this, the recent Standard Chartered furore appears unlike many of the recent financial scandals.  It can be construed as an opportunistic, badly concealed political attack by a New York financial regulator trying to profit from discrediting a bank run from London to the benefit of Wall Street institutions.

Whilst the Governor of the Bank of England has recently said as much, the reality is that the New York regulators are reaping the rewards of poor regulation in the UK. Had the Bank of England and the FSA not managed to be so totally inept in the Barclays et al LIBOR scandal, it would not now be open season on attacking any London based institution, whether they deserve it or not.  The Bank of England chose to ignore the eminent advice of the US Federal Reserve which could have been an early alert to the Libor scandal in the first place.

The only way forward has to be to put aside self-interest, look at the longer term picture and resurrect the reputation of the City to reflect the values and ethos central to the Olympic spirit.  We need to fundamentally improve standards here in London to regain the reputation for integrity and quality which we have recently lost. It's not just the other banks that suffer from guilt by association from these scandals but any financial services institution. To the man in the street we are all the same, they do not differentiate. 

The families, trainers, medics and their full support teams have all rallied in support of British Sport but where is the rallying in support of our financial services industry which contributes 10 per cent of our GDP? We are in serious danger of losing our place on the podium when it comes to the world’s winning financial centres.  

I implore those in positions of power and government to step in and ensure that the codes and regulations that govern our financial services industry are fit for purpose and adhered to in word and spirit and that they provide a robust framework to end the shoddy practises eroding the industry’s reputation on the national as well as international stage.  The trade bodies, be they the bankers, insurers, pension providers or fund managers, need to be 'dope' tested and I don't mean dope as in drugs but dope as idiotic! To have professional standards and regulations overseen, as they are in many cases, by trade bodies from the financial services industry is the equivalent to putting the supplier of enhancing drugs in charge of the doping tests. No longer can the regulator be allowed to delegate their responsibilities to self-serving trade bodies.

What is needed is not more regulation but more effective regulation – regulation that is based on fundamental over-riding principles applied consistently, simply and overseen by independent bodies, not self-interested trade groups.  London needs to restore its position in the global league table of financial centres.

Photograph: Getty Images

Gina Miller is the founding partner of SCM Direct and spearhead of the True and Fair Campaign. www.trueandfaircampaign.com

Photo: Getty
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Forget planning for no deal. The government isn't really planning for Brexit at all

The British government is simply not in a position to handle life after the EU.

No deal is better than a bad deal? That phrase has essentially vanished from Theresa May’s lips since the loss of her parliamentary majority in June, but it lives on in the minds of her boosters in the commentariat and the most committed parts of the Brexit press. In fact, they have a new meme: criticising the civil service and ministers who backed a Remain vote for “not preparing” for a no deal Brexit.

Leaving without a deal would mean, among other things, dropping out of the Open Skies agreement which allows British aeroplanes to fly to the United States and European Union. It would lead very quickly to food shortages and also mean that radioactive isotopes, used among other things for cancer treatment, wouldn’t be able to cross into the UK anymore. “Planning for no deal” actually means “making a deal”.  (Where the Brexit elite may have a point is that the consequences of no deal are sufficiently disruptive on both sides that the British government shouldn’t  worry too much about the two-year time frame set out in Article 50, as both sides have too big an incentive to always agree to extra time. I don’t think this is likely for political reasons but there is a good economic case for it.)

For the most part, you can’t really plan for no deal. There are however some things the government could prepare for. They could, for instance, start hiring additional staff for customs checks and investing in a bigger IT system to be able to handle the increased volume of work that would need to take place at the British border. It would need to begin issuing compulsory purchases to build new customs posts at ports, particularly along the 300-mile stretch of the Irish border – where Northern Ireland, outside the European Union, would immediately have a hard border with the Republic of Ireland, which would remain inside the bloc. But as Newsnight’s Christopher Cook details, the government is doing none of these things.

Now, in a way, you might say that this is a good decision on the government’s part. Frankly, these measures would only be about as useful as doing your seatbelt up before driving off the Grand Canyon. Buying up land and properties along the Irish border has the potential to cause political headaches that neither the British nor Irish governments need. However, as Cook notes, much of the government’s negotiating strategy seems to be based around convincing the EU27 that the United Kingdom might actually walk away without a deal, so not making even these inadequate plans makes a mockery of their own strategy. 

But the frothing about preparing for “no deal” ignores a far bigger problem: the government isn’t really preparing for any deal, and certainly not the one envisaged in May’s Lancaster House speech, where she set out the terms of Britain’s Brexit negotiations, or in her letter to the EU27 triggering Article 50. Just to reiterate: the government’s proposal is that the United Kingdom will leave both the single market and the customs union. Its regulations will no longer be set or enforced by the European Court of Justice or related bodies.

That means that, when Britain leaves the EU, it will need, at a minimum: to beef up the number of staff, the quality of its computer systems and the amount of physical space given over to customs checks and other assorted border work. It will need to hire its own food and standards inspectors to travel the globe checking the quality of products exported to the United Kingdom. It will need to increase the size of its own regulatory bodies.

The Foreign Office is doing some good and important work on preparing Britain’s re-entry into the World Trade Organisation as a nation with its own set of tariffs. But across the government, the level of preparation is simply not where it should be.

And all that’s assuming that May gets exactly what she wants. It’s not that the government isn’t preparing for no deal, or isn’t preparing for a bad deal. It can’t even be said to be preparing for what it believes is a great deal. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.