The City is fighting a war on two fronts. The bulk of its energy is being spent on dealing with Brexit, but over the hill the drumbeats of Jeremy Corbyn’s forces are getting louder.
Financial services can survive the former, but would suffer heavy losses at the hands of the latter. Brexit followed by a Labour government would be akin to crawling out of the frying pan – only to be thrown in the fire. Yesterday, two competing visions for the future of financial services were articulated.
David Davis, the Brexit secretary, moved to reassure the EU that regulatory standards would not fall after Britain leaves the bloc. There would be no race to the bottom, he said, stressing that “Singapore off the coast of Europe” is not the government’s objective.
His words were welcomed by City lobby groups, who between them have been beavering away on detailed proposals for post-Brexit trade in financial services. Miles Celic of TheCityUK said David Davis has delivered “a significant step forward” by embracing mutual regulatory recognition, while UK Finance chief executive Stephen Jones stressed that his sector “does not want to see any weakening of current regulatory standards.”
The Cabinet meets to thrash this out tomorrow, and ministers will have to balance the demands of the City with the latest salvo from 60 backbench Tory MPs who insist the UK must gain “full regulatory autonomy”. A decision on the UK’s desired end state will have to be made soon, and the City is waiting.
Meanwhile, from the wings, Corbyn has launched a fresh attack on the “undemocratic and pernicious” forces of finance, telling a conference yesterday that he’d bring the City to heel. Corbyn is at his most ideological when talking about the City – a vital sector that he seems hellbent on diminishing.
While Brexit represents a challenge that can be overcome, a Corbynite Labour government would constitute a clear and present danger. It would, in Corbyn’s own words, be “a threat” to London’s hard-won standing as a global financial centre.
These are challenging and precarious times for the City. It would be a calamity if the sector navigated Brexit only to find itself at the mercy of vengeful socialists.