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CRIMSON TAZVINZWA, AIWA! NO!|With just two months to go before Brexit, 1,500 finance jobs have been shifted or created overseas. Big financial firms surveyed by Reuters in January said that figure would likely rise to nearly 2,000 by the end of March 2019.
London (CNN Business) Brexit hasn’t happened yet but it’s already shrinking the United Kingdom’s financial services industry.
Banks and other financial companies have shifted at least £800 billion ($1 trillion) worth of assets out of the country and into the European Union because of Brexit, EY said in a report published Monday. Many banks have set up new offices elsewhere in the European Union to safeguard their regional operations after Brexit, which means they also have to move substantial assets there to satisfy EU regulators. Other firms are moving assets to protect clients against market volatility and sudden changes in regulation.
The consultancy said the figure represented roughly 10% of the total assets of the UK banking sector and was a “conservative estimate” because some banks have not yet revealed their contingency plans.”Our numbers only reflect the moves that have been announced publicly,” said Omar Ali, head of financial services at EY.
“We know that behind the scenes firms are continuing to plan for a ‘no deal’ scenario.”EY has tracked 222 of the biggest UK financial services companies since the Brexit referendum in June 2016.
That’s what Boris Johnson, the former foreign secretary, wants. Heaven would involve Britons changing their minds and staying in the EU, the outcome favoured by pro-Europeans fighting for a new referendum. Purgatory is the half-in half-out option that the prime minister Theresa May has negotiated.
Even pro-Europeans don’t, of course, believe that the EU is literally heavenly. As with any human invention, the EU is imperfect and needs reform. However, it is vastly superior as a mechanism for advancing peace, power and prosperity to the versions of Brexit that Johnson and May are pushing.
To get to “heaven”, MPs first need to reject both “purgatory” and “hell”. They will then conclude that the only sensible option is to ask the people whether they wish to stick to the decision to leave the EU that they took in the 2016 referendum.
We crossed an important milestone on Tuesday when MPs massively rejected the prime minister’s deal. Neither pro-Europeans nor hardline Brexiters like it because it is bad for both our prosperity and our power. We won’t get full access to the EU’s market but we’ll still end up following many rules without a say on them.
MPs are then likely to make crystal clear that they don’t want Johnson’s Brexit either. This would build on an important vote in Parliament on January 8, which made it harder for the government to crash out with no deal.
Although MPs will cast around for alternatives, the EU has said that the only deal is the one already on the table. If we want to discuss different future trade arrangements, we can do that after we’ve left. But first we have to sign the divorce deal that the prime minister has agreed.
The next task for pro-Europeans will be to convince Jeremy Corbyn to back a new referendum. His Labour Party overwhelmingly wants to stay in the EU, so the chance that the leader of the opposition will eventually come on board is good. There will probably then be a majority in Parliament in favour of a new “People’s Vote” – given that several MPs in May’s own Conservative Party want one too.
The public are likely to be given a choice between heaven and purgatory, given that so few MPs think hell is sensible. It is possible, though, that the choice will be a simple one between heaven and hell – or a three-way choice between heaven, hell, and purgatory.
Parliament will need to pass a new law to authorise this referendum. It can do this either the easy way, with the prime minister’s support; or the hard way, by forcing it through against her wishes. MPs have the tools to get their way following a decision by the Speaker of the House of Commons on January 9 which effectively lets them take control of the Parliamentary timetable.
We can’t do all this by March 29, the date we are supposed to leave. So we’ll need to ask the other EU countries for extra time.
Pro-Europeans will then need to win the referendum. And to do that, a much more positive campaign will be needed than the one David Cameron ran when he was prime minister. That merely defended the status quo and focused on how bad it would be to leave the EU.
The problem is that many voters, particularly in towns which have been starved of investment for decades, find the status quo intolerable. A new campaign will have to show that the deep-seated problems are the fault of Westminster not Brussels – and convince voters that staying in the EU will give us the resources to tackle them. CommonGround, a pro-European campaign group, has already started outlining some ways to do this.
We will also need to explain how being in the EU actively advances our interests in so many ways.
Three years ago, even many politicians and journalists had only a hazy understanding about how the EU works. They have since been on a crash course – and have learnt a lot.
Many now realise that we would have struggled to bring peace to Northern Ireland without our EU membership. And they know that a single market needs common rules – and it is better to sit round the table helping make those rules rather than following them blindly.
Many also see the benefit of being in the world’s largest economic bloc when other big powers such as America and China are throwing their weight around – and, again, that it is better to help shape the EU’s trade policies than follow them passively.
Three years ago, Donald Trump wasn’t in the White House and Vladimir Putin wasn’t poisoning people in the UK. MPs are starting to see that the world is more dangerous and that, although the EU has its own problems, it is a relative oasis in a sea of trouble.
Even Johnson came to see that we have more in common with our EU allies than with Trump’s America when he was foreign secretary. Whether it is on climate change, the Iran nuclear pact or moving the embassy to Jerusalem, we are on the same side as Europe.
This is no accident. We share common values and common interests because we are in the same part of the world.
In 2016 the British people were offered a fantasy version of Brexit. If, after mature reflection on the reality of Brexit, they decide to stay in the EU, this will be a powerful antidote to populism across Europe.
We hope that the other European countries will then welcome us with open arms. We have a lot of work to do – and will be stronger together.
Policymakers may look to keep the door open for a hike next year if a Brexit deal is agreed.
|CRIMSON TAZVINZWA, AIWA! NO!|The Bank of England is expected to keep interest rates unchanged at 0.75% on Thursday and remain firmly in wait-and-see mode until Brexit uncertainty clears.
The last rates decision of 2018 comes as prospects of a Brexit deal are left hanging in the balance, with the economy showing signs of stagnating as businesses, consumers and home-buyers put big spending decisions on hold.
Economists believe members of the Bank’s nine-strong Monetary Policy Committee (MPC) will vote to keep rates on hold until there is clarity over a deal and most likely after the UK has quit the EU on March 29.
Just weeks ago, the Bank warned in its Brexit scenario analysis that Britain could be tipped into a recession worse than the financial crisis in the event of a no-deal disorderly Brexit.
Governor Mark Carney has insisted that rates could go up or down after a cliff-edge Brexit, with the Bank’s analysis warning they might be hiked to 5.5% if a further fall in the pound sends inflation soaring.
Investec economist George Brown said: “Given the prevailing Brexit uncertainty, we expect policymakers to refrain from altering any aspects of its monetary policy toolkit.”
It will potentially decide whether Britain’s destiny for the next few decades is to be that of a once-again independent, outward-looking, sovereign democracy, or a weakened, impotent, deferentially grovelling satrapy on the fringes of the neo-colonial Brussels Empire.
The stakes could not be higher. Yet the principal players in the grouping of MPs in whose hands most lies the power not only to halt but reverse the monstrous betrayal of country, and arguably of democracy itself, which, given the outcome of the 2016 EU referendum, the latter fate would be – the putative ‘Tory Brexiteers’ – are a self-indulgent, fissiparous gaggle of biddable loyalties, concealed ambitions and flexible reliability.
We can first dismiss the so-called ‘Cabinet Brexiteers’. They deserve little but our eternal contempt. Once Boris Johnson, David Davis and Steve Baker had resigned in the wake of the Chequers Summit, their ‘We will stay in the Cabinet and continue to press the Prime Minister to change her approach from inside’ position looked increasingly unconvincing and self-serving. Once Dominic Raab and Esther McVey had resigned rather than support May’s Orwellian-labelled ‘Withdrawal’ Agreement it became almost comically untenable.
Penny Mordaunt, Andrea Leadsom, Liam Fox, Chris Grayling and Michael Gove appear to have maintained their implausible positions only up to the point when, forced to choose between upholding democracy and their manifesto pledges, or retaining the trappings and rewards of Ministerial/Cabinet office, they seem to have chosen the latter, suddenly becoming converts to May’s BRINO-Deal with attempted justifications, not excluding warnings that rejection may mean Brexit not actually happening at all, which are wholly unpersuasive.
Some senior staunch Brexiteers, notably Iain Duncan Smith, Bernard Jenkin and Owen Paterson, appeared not to join their ranks at all. The ‘revolt’ collapsed in a welter of recriminations, doing nothing to suggest this was, or is likely to be, an effective route to stopping Parliamentary approval of May’s Withdrawal Agreement. Indeed, rumours circulate of knighthoods and peerages dangled as inducements to support May.
The younger, more recent, more committed to Brexit intake of Tory MPs, however, give more grounds for hope. Just to take three at random, the personal statements of opposition to May’s BRINO-Deal and pledges to vote against it from MPs Julia Lopez, Suella Braverman and Lucy Allan are impressive.
Conservative Home has been maintaining a running total of how many Tory MPs now oppose May’s (non)-Brexit deal. At the time of writing, the figure including all of the ‘definitely’, ‘probably’, and ‘maybe’ categories, stands at approximately 100.
Together with the DUP and Labour Eurosceptics, this ought to be enough to ensure the deal’s defeat – unless Labour and the other Europhile parties for whom it is not Remain-ery enough do an about-turn and support the Government. Quite what May’s position would be in the event of her widely criticised and opposed Brexit withdrawal deal passing via reliance on Labour votes is a moot point.
Moreover, not for nothing is the ‘Conservative’ Party in Parliament known as one of the most capricious and untruthful electorates in the world. The stories of pledges to support A in public, only to back B in private and vote for C are legendary, which makes all the responses and surmising used in calculating numbers consumable only with a large pinch of salt.
It looks increasingly likely at the time of writing that May will seek to convert some of the waverers by framing the Commons debate in tribal political party terms, a Conservatives vs Labour contest, rather than the Leave vs Remain, or at least Clean-Brexit vs Closet-Remain tussle which it both is and ought to be presented as. This is already obvious from May’s insistence that what promises to be a farcical all-Remain TV ‘debate’ is structured on this basis, demanding to go head-to-head only with Jeremy Corbyn, but not with either Johnson or Rees-Mogg, both of whom she knows would, figuratively speaking, eviscerate her.
Furthermore, although there appears to be a Tory consensus against May’s BRINO-Deal, that consensus fractures as soon as it comes to discussion about what should happen next, after its expected defeat. Incredibly, some MPs favour going back to the EU and asking for better terms, despite Brussels’s insistence that none will be offered.
Others (some, it should be noted, until quite recently Remainers) are trying to revive the idea of an EEA/Norway-style option, despite its inability to cover the one point May seems able to fixate on, namely Freedom of Movement, and notwithstanding its other flaws.
Yet others, one suspects, would like nothing more than to drop the whole idea of leaving the EU, and forget about Brexit altogether – no doubt hoping that by the time the next scheduled General Election comes round, the electorate will have subsided from anger into a sullen, grudging acceptance. Some hope.
All of these must be avoided, despite the predictable efforts of Theresa May and her No 10 team to divide and rule. The defeat of May’s deceitful and damaging BRINO-Deal must trigger a coalescing of approval around an exit from the EU on No-Deal, WTO terms. Not only is it the most advantageous both financially and economically: it is the only option that delivers the elements of the settlement for which a majority of voters, in a 72 per cent turnout, voted.
Given the anger at May’s perceived betrayal reported from around the country outside the Westminster bubble, it is likely also to be the only option that would assist the avoidance of a catastrophic breakdown of public trust in democracy and its institutions, and which might – just – ensure the ‘Conservative’ Party’s unmerited survival as a viable political force.
But unless the ‘Conservative’ Party’s so-called Brexiteers put aside their differences, resist both inducements and threats from their party leader, and combine both to defeat May’s BRINO-Deal and force a pivot to a No-Deal EU withdrawal to WTO terms, there is now a real risk that Brexit will be finished, and lost, with hugely damaging consequences. That their party will be finished also, and deservedly so, is scant consolation.
|CRIMSON TAZVINZWA, AIWA! NO!|Jacob Rees-Mogg has launched a personal attack on the Bank of England Governor Mark Carney, saying he should not have been in the post for some time.
Bank of England governor Mark Carney has warned ministers that a “no-deal” Brexit could see house prices crash by a third, Sky sources say. Briefing Theresa May and her top team in Downing Street, Mark Carney laid out three different scenarios the Bank believes could come to pass if Britain leaves the EU without a withdrawal agreement. The worst case scenario would see Britain go into recession, a slump in the value of the pound and a crash in house prices.