Realist, not conformist analysis of the latest financial, business and political news

Alarmingly, Philip Hammond Is Right – City Access To The EU Benefits The EU

Philip Hammond, unusually for a British Chancellor of the Exchequer, looks alarmingly close to being right over this issue of trade. Sure, The City selling stuff to Europeans benefits certain people in London and surrounds, they do earn money from it after all. But the people who really benefit from such are the people in Europe. They get all those financial services. And they must be worth more than they cost them otherwise they wouldn’t be buying them, would they?

Philip Hammond will tell European leaders that including Britain’s financial services sector in a Brexit deal will be in the EU’s interest as well as the UK’s.

I wouldn’t say that it’s in the EU’s interests, the EU being the people in Brussels who get a skim off what happens across the continent. But it most certainly benefits the 450 million odd who will be in the remnant-EU after Brexit. On those obvious grounds that they get those financial services they desire out of the deal:

Philip Hammond is to insist that the City can be part of Britain’s post-Brexit trade deal – and that this would be in the interests of Europe as well as the UK.

The Government wants free access to the EU for the vast financial services industry to be part of any deal, but Brussels has so far proved resistant.

In a speech on Wednesday, the Chancellor is to address those doubtful about such an arrangement, arguing that not only is it possible, but that it would be “very much in our mutual interest”.

It’s not really true that it is in our mutual interest. Again, it’s certainly of interest to those specific people doing that selling but for the rest of us Brits it’s all rather ho hum. The people who really benefit are the consumers of those financial services, those Europeans.

As it always is with trade. Imports are the very point of the process, the idea even. They are what make us all richer, gaining access to what Johnny Foreigner does better than we do. This time around it’s we on our sceptered isle who are Johnny F and it’s those wogs beyond Calais who benefit. As Mervyn King has pointed out, London simply is the wholesale financial market for Europe – and in certain fields the world – and it is the consumers of the financial services who benefit most. Continued access to those benefits is therefore of value to dem wogs beyond Calais.

That those gaining the skim in Brussels can’t or won’t see this is one of the very good reasons for us to be leaving of course.

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Nautical Nick
Nautical Nick
6 years ago

Spot on! Brussels moans that we haven’t said what we want. So we tell them: we want free trade in financial services. EU says “that’s not on the table”. Huh? Yes it is! We’ve just put it on the table!

This exposes the EU for what it is. Grrrr!

So Much For Subtlety
So Much For Subtlety
6 years ago

I wouldn’t say that it’s in the EU’s interests, the EU being the people in Brussels who get a skim off what happens across the continent.

That is the problem. The EU bureaucrats who get to squeeze the banks for presents, invitations to Wimbledon and the like will be out of luck. They cannot squeeze bankers in London.

So expect them to do something stupid. Better to cream off 5% of a much smaller pie.

Quentin Vole
Quentin Vole
6 years ago

The underlying problem of the EU is the democratic disconnect between the decision-makers in the commission and those they rule over. Phil Hammond must have, somewhere in the back of his mind, the thought that if his decisions end up making everyone worse off, this may have an adverse affect on his (and his government’s) ability to get re-elected. He’ll still make blunders, of course, because he’s none too bright, but he will tend not to do so deliberately. Whereas Juncker, Barnier, Selmayr and their merry men need have no such concerns. Unsurprisingly their only thought when taking a decision… Read more »

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