Think global not European to keep the City and Britain prosperous

Brussels tends to blame Anglo-Saxon capitalism for all the Euro’s failings


I’ve been lying here in bed in the London Bridge hospital recovering from major surgery. After months of agonising pain I now hope that my back and neck have been sorted out and that after a few weeks I can get back to work.

One of the big advantages of the room I’m in is that I can look out my window down at London Bridge, watching all the worker ants going to and from work, reminding myself that I did that every day before I gave it all up for politics.

The view is quite astonishing because what I have in front of me is a thousand years of London history. I look to the right and I can see the Tower of London, built by William the Conqueror. Then there’s the Monument erected in memory of those who lost their lives in the blazing inferno of the Great Fire in 1666 which was able to devastate about 90 per cent of the houses and businesses because of the cramped conditions. But people lived in them because London was the place to be if you weren’t born into wealth and wanted to earn a living and make something of yourself.

I can also see the newer buildings of the Gherkin and the NatWest tower, showing that after centuries the City of London remains still a financial hub. Everything that has been great about London is right in front of me; everything that has been wealth-creating for the country is here.

And why? Well it started with the Romans who first established “Londinium” and ever since then the culture that we’ve developed has been one of mercantilism, one of trade. And in many ways, one of outward-looking expansionism. The British Empire was based on trade and just across the river from me is the London metal exchange, where I worked for 20 years, and the plethora of financial markets, products, innovation and ideas. London is a global financial services centre.

And yet, this place that has produced such enormous wealth, not just for a few but for the whole country, is now facing problems. Yes of course there was the greed and  the malpractice of some of the banks, exposed this week in perhaps an even  more hilarious fashion than before by the reported antics of the Rev Paul Flowers.

But much of this was caused by ignorant politicians, stoking a credit bubble by removing the powers of the Bank of England and handing them to the useless FSA. Why do the bankers get all the blame?

What really worries me is London’s future. Shall we continue to be the centre for global trade or are we going to find ourselves hemmed in and stuck with a vision that is very much smaller? You see the big thinking idea 40 years ago behind the “Common Market” was that we would extend our domestic marketplace, specifically in manufactured goods, and we would expand into a European market, free from tariffs.

I was too young to vote in that referendum, but I can understand why people were eager to vote for a greater opportunity for free trade: free trade makes everyone wealthier, from the richer economies who can turn primary and secondary stage goods into finished products to the developing countries who can tear off the shackles of subsistence farming which keeps them in abject poverty.

But when it comes to trade in services, such as insurance, there is nothing about the European view that is big or forward-looking at all. The trouble is that there is a culture in Brussels that tends to blame what they see as Anglo-Saxon capitalism for all the failings of the euro. Even back in 2006 there was a report into Hedge Funds with a German MEP saying that the capitalist, profit-making idea of hedge fund products was not wanted in the EU. What? No jobs? No tax revenue?

I look at this City and I realise that an awful lot of the reinsurance business has left and gone to Bermuda; much of the hedge fund business has moved to Zurich and Geneva, and some of it has gone to Singapore and will never come back.  That’s jobs that have gone. That’s potential growth and prosperity moved away from this City where it flourished. But the  City is not just London. In Cardiff, in Birmingham, in every major city the financial services industry provides jobs  and wealth. That’s nearly 10 per cent of the work force in this country and over 15 per cent of the tax revenue.

I want the City of London to become a bigger version of Switzerland today.  That means sensible, appropriate regulation shaped in a UK Parliament and not by  the European Commission. To succeed  in the future we shall need to compete with Singapore, not Paris. This point is entirely lost on our political class and  the supposedly  pro-business CBI.

Britain must go global.

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