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It's no coincidence Theresa May chose Florence as the location for her Brexit speech tomorrow

Florence is a city known for its historical trading power: the Renaissance 'cradle of capitalism' where 'greed was good' 

Mark Dearn
Thursday 21 September 2017 11:48 BST
Theresa May and Liam Fox have been jetting around the world pursuing trade by pressing palms with everyone from Donald Trump to Rodrigo “the punisher” Duterte and the Saudi government
Theresa May and Liam Fox have been jetting around the world pursuing trade by pressing palms with everyone from Donald Trump to Rodrigo “the punisher” Duterte and the Saudi government (Getty Images)

When Theresa May gives her widely anticipated speech tomorrowy, “rhetorical carpet bombing” aside, it will be scrutinised far and wide for what it reveals about the government’s approach to Brexit. And given what we already know about the government’s ideological approach to trade, she couldn’t have picked a better location than Florence.

As May’s spokesman explains, Florence is “a city known for its historical trading power”: the Renaissance “cradle of capitalism” where "greed was good" drew its immense power from a banking system using novel financial instruments to bypass existing laws.

But after flourishing for a century, the system collapsed. Then, led by radical preacher Savonarola, Florentine society infamously rejected ostentatious high finance wealth in the “bonfire of the vanities”.

It all sounds somewhat familiar. Ten years ago we experienced a financial crisis driven both by the very nature of our economic system and financiers’ use of tricks to hide their activities in a complex web allowing them to extend credit for mortgages that could never be repaid.

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And in the ten years since, the UK – in step with lobbies like TheCityUK – has continued to lead efforts to re-create the conditions that generated the crisis in the first place.

Theresa May and Liam Fox have been jetting around the world pursuing trade by pressing palms with everyone from Donald Trump to Rodrigo “the punisher” Duterte and the Saudi government, batting away any criticism against their vision of bringing “jobs and prosperity to the UK”.

When Fox visited the USA, he couldn’t have been clearer about his plot to use trade – and its central agenda of matching regulations between trading partners – to unleash the wrecking ball of deregulated financial services.

Speaking in the same week that Trump outlined plans to destroy banking reforms brought in after the financial crisis, Fox said he wanted the UK to lead the "next financial services revolution" which will make the last "look almost an underachievement".

The agenda hasn’t changed one iota from what the UK sought – via the European Commission – before Brexit.

A key issue in negotiations for TTIP, the widely opposed EU-USA trade deal consigned to the deep freeze by pan-European campaigning, was the EU’s push for the inclusion of financial services in the deal against the wishes of the USA.

But as UK trade officials admit, the UK was the “loudest” voice arguing for financial services inclusion. And when the Commission published its financial services offer, the response of TheCityUK was that it “reflected so closely the approach of TheCityUK that a bystander would have thought it came straight out of our brochure on TTIP.”

In a US-UK deal pushed by the same Wall Street and City of London lobbies that surrounded TTIP, we can expect much of the same – but without any opposing voices from the EU or a US administration now geared to financial deregulation.

As under TTIP, rules could target any regulatory differences across savings, bank and insurance services, trading in stocks and derivatives, tax advisory services, hedge funds, private equity funds and credit rating agencies, among others. Divergent regulations would be framed as “barriers to trade and investment” which “undermine … global financial stability”.

And if the deal were to include a “regulatory cooperation” body, the business-led grouping would be empowered to stop regulations before they ever see the light of day. And, if it were included, investors could sue the government for any regulation not meeting their “legitimate expectations” in a dystopian, secret “corporate court” system.

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A major danger of Brexit is that it is so all-consuming that the government could gain a free hand to secretly negotiate trade deals – with anyone voicing opposition labelled a Brexit traitor or failing to understand the national interest in replacing what we may lose from the EU.

And as the government readies itself to sacrifice everything from the NHS to our most prized social and environmental rules to that end, we still lack a trade bill that guarantees the role of parliament in scrutinising the government, thus providing a channel for the British people to ensure that Brexit trade deals are more than pyrrhic victories.

Under our current system, the government can pass trade deals without any debates. And while it must allow deals to be available to MPs for a period of 21 days, any objections – if they can be tabled at all – can be easily side-lined.

We’ve already seen the attitude of Liam Fox to scrutiny of his secret trade agenda: EU-Canada deal Ceta, which will be partially applied across the EU from today, will hit the UK without parliament ever having debated it.

Fox intentionally side-stepped scrutiny of Ceta, subsequently apologising after a committee chairman explained that: “Overriding scrutiny … before MPs have had an opportunity to debate its content and implications for the UK is a serious matter."

Only last week, another committee chair upbraided the government for not replying to a review of trade six months after it was written.

With a trade bill white paper due imminently, we must be aware of any attempted government power grab enabling it to secure trade deals crafted for the few without any oversight from parliament.

And with the stability of the entire financial system at risk as we repeat the follies of history, while we must look to our MPs to secure a say for the British people, Theresa May would do well to look to the history of Florence.

Mark Dearn is a senior campaigner for War on Want, and a board member of the UK Trade Justice Movement

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