This is part of the FUD campaign

Wall Street banks could desert Britain if the country decides to leave the European Union, senior figures in the industry have reportedly said.

Some major institutions are believed to be already drawing up plans to move activities abroad amid concerns that the UK is drifting further away from the EU.

Most US and Asian banks currently run their main European operations from the UK, which gives them a passport to provide services across the EU. But if the UK left the European Union, it is believed to be unlikely foreign banks based in London would carry on receiving the same rights.

According to the Financial Times, US-based banks including Bank of America, Citigroup and Morgan Stanley are considering Ireland as a favourable alternative location for business currently conducted in London.

Economic clustering just doesn’t work that way. The City is The City just because it’s The City. There’s half a million people there, all working on the finances of the globe. It’s the same reason the latest pottery to open in the UK opened in Stoke on Trent. Just because that’s where everyone who knows how to do it is.

Being outside the EU would be as much of a problem as being outside the eurozone has been. The same sources told us that would be disastrous for the City…….

11 thoughts on “This is part of the FUD campaign”

  1. Come on. you know it is more complicated than that.

    As you have mentioned on previous occasions the Eurobond market only got started in because of mistakes the US authorities made. The argument that “Wall Street is Wall St just because it is Wall St” didn’t hold then.

    Similarly (as you oft mention) the increase in an unattractive tax environment in the UK will hasten the move away to Dubai or Singapore or Geneva.

  2. “it is believed to be unlikely” = “For our argument to be true, this has to be the case” = “wishful thinking”.

  3. Pfft, they’re *far* more likely to be driven away by the ridiculous over-regulation if we stay in.

  4. Is there a good example of a cluster that moved on, as opposed to one whose industry died out?

    Stoke on Trent is an example of a cluster that eviscerated as production moved elsewhere – not an example one would wish the City to follow.

    Lancashire is still the UK centre for Advanced Flexible Materials, but that’s a much smaller hub than when it was the dominant global force in the textile industry, before cotton production shifted to Japan.

    I’m struggling to think of a cluster that entirely upped sticks, particularly one that did so entirely for administrative or political reasons. Closest I can think of is how the Indian boycott accelerated the move of the cotton industry from Lancashire to Japan, but that trend was pretty much inevitable by then anyway.

  5. MBE

    An interesting challenge, I’ll have a go.

    Car making from Coventry to Sunderland
    Commodity trading from London to Geneva
    Flower growing from Holland to Kenya
    Plant breeding from Kew to US / India
    Nuclear from UK to France
    Oil tech from Pennsylvania to Texas
    Offshore from New Orleans to Aberdeen
    Paper from Germany to Finland

    And to scrape the barrel, think tank from Wandsworth to Downham Market? Well, only joking but…

    Think potatoes, tomatoes, maize, chillies, sugar cane, wheat…

  6. Oh, and another two:

    The Steel and Coal Agreement (forerunner of the EU)… fuck off, anywhere but here!

    And Detroit… to anywhere but Detroit.

  7. @bif

    Some interesting ones there I’d forgotten or hadn’t though of, thanks! But like Lancashire textiles I think a lot of them are more about one cluster being reduced to a shadow of its former self while another one grows at its expense, than a wholesale shift. Not that such evisceration is a good thing: part of my point is that I thought Timmy was being naughty to suggest economics prevented clusters from moving on, while quoting Stoke as an example. If the City went the way of the Potteries, it wouldn’t do British GDP any favours.

  8. @bif

    Without wanting to examine your list in exhaustive detail:

    Coventry has declined steeply as a car-making cluster, this might be the best in your list? But I think there is still a tiny bit of taxi production, Jaguar’s administrative HQ, some R&D stuff in the area, and if you broaden out geographically a wee bit isn’t there still production nearby, at Solihull and Castle Bromwich. I’m quibbling a lot here, Coventry as an automotive centre is pretty far gone, but arguably it still represents a minor cluster of expertise.

    London still has commodities trading (LME etc) even if a lot of action now takes place in Geneva.

    The Dutch still possess major, world-leading expertise in floriculture. Actually in terms of volume I think you might be wrong on this one – aren’t the Dutch still the Big Boys in this field? The point as I understand it is that the new players are growing quickly, with a focus on exports, while a substantial chunk of Dutch production is for internal consumption. Though a lot of those exports are still distributed and marketed via the Netherlands, even if not grown there.

    New Orleans is still a major petrochemical centre.

    And so on.

  9. MBE

    Well yes but no but but yes.

    Great Yarmouth went from prime port to backwater in about (?) three years as the action moved north.

    It may take longer for other industries. But history shows…

    I’m keen on exit from the EU, but I wonder if we’ll be able to pull up the anchor at the same time we throw the pilot overboard.

  10. Great Yarmouth is a nice example. Somehow manages to be a Norfolk coastal backwater while dispensing with rustic or seaside charm!

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