RBS chairman Sir Howard Davies warns banks will quit Brexit Britain without urgent Government action

The Manchester City supporting grandee probably didn't mean to say ministers don't know what they're doing when he did the media rounds over the weekend, but it's starting to look that way and the City will be hit hard as a result

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The Independent Online

“You don’t know what you’re doing, you don’t know what you’re doing.” 

That chant can be heard around football grounds up and down the UK in response to poor play overseen by hapless management. As a Manchester City fan of many years standing, Sir Howard Davies, the chairman of RBS, will probably have heard it more than a few times. 

With the British Government looking very much like the Man City team that got relegated to the third tier of English soccer in 1998, he could have been forgiven for breaking out into that chant while doing the media rounds on Sunday. 

But that’s just not the done thing from someone who has had more top jobs in the City than City’s current super-manager Pep Guardiola has had in football. 

A man who has variously been chairman of the Financial Services Authority, Director General of the CBI, Deputy Governor of the Bank of England and director of the London School of Economics (and that’s not even a definitive list) is supposed to behave with a bit of decorum. 

So he said this on old pal Robert Peston’s Sunday TV show: “I think it is damaging if we don't get a transitional deal (for City banks) because I think you will then see banks and financial institutions making decisions on the basis of uncertainty.

“They will not wait because they have to make a decision which will allow them to be, to continue to function in the event of a hard Brexit if that's a possibility.”

And there was more: “They will not sit back, they are currently making contingency plans and once you've got a contingency plan - hey, there is a risk you might implement it one day.

”And therefore I think that it is quite urgent“.

In other words, you don’t…

No, no, no, Sir Howard would doubtless say at this point. That's not what I meant at all. Well, the taxpayer is his biggest shareholder. Which effectively makes Chancellor Philip Hammond his boss.  People who go around claiming that their bosses don’t have a clue don’t tend to last long in their jobs. 

Sir Howard would likely say that he was merely sounding a warning, and appealing to the Government to recognise a clear and present danger facing his industry. That, in his urging ministers to formulate the transitional arrangements he wants, he was only saying in public what a lot of bankers have been saying in private. As an influential figure, who commands attention (hey look, I’m writing about him) he is ideally placed to get across a point that needs to be made. 

All of that is likely true. The trouble is the Government he wants to influence gives every impression of living up to the football chant. Beyond shouting "Brexit means Brexit" at Remainers, it really doesn't appear to know what it's doing. 

The city might account for a scarily large percentage of GDP but, given the lengthening list of problems ministers have to deal with, and the fact that the Brexiteers among them had nothing resembling a plan for what the future would look like after getting their hearts’ desire, Sir Howard’s intervention may end up falling upon deaf ears. 

What do the future of the City and its banks’ desire for “transitional arragneements” matter when you’re trying to work out how on earth to deal with court challenges to Brexit, an economy that's starting to quake, restive backbenchers who keep quitting the party, Donald Trump, and what he might mean for the UK (good or ill), on top of everything else. 

It might not have done much good even had Sir Howard trotted out on to Peston’s sofa wearing his Sky Blue Aguero replica shirt with a striped scarf and a beanie hat before starting up the chant in response to the first question. 

The media would have had a field day, and we’d all have had a good laugh, but would the Government have listened? It's doubtful. After all, Sir Howard wouldn’t have needed to go public in the first place if he were getting any traction at all in private. An appearnace on Peston probably won't change that. 

Sad, but true: They don’t know what they’re doing. They don’t know what they’re doing. 

 

 

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