City boss: Tell the EU what we want
(but don’t fear that firms will ‘try the frogs’)
MARK BOLEAT is the City of London’s top politician. Technically just another local council chief – but this is no ordinary council. As head of the City of London Corporation he oversees Britain’s financial capital, its multi-billion-pound banking, insurance and financial markets industry.
Last year the City’s financial industry and its army of well-paid workers contributed £71 billion in taxes to the Treasury – nearly 12 per cent of the whole national tax revenues. And with finance and the economy central to Brexit, it puts Boleat at the heart of Britain’s EU debate.
In the campaign Boleat made no bones about where he stood, warning of the threat to the City. Sitting in his private meeting room in the Guildhall – the City of London’s historic town hall – he is still warning of the cost. Other European cities are set to take business he declares.
‘The places that will get business in Europe will be Luxembourg, Dublin and Frankfurt. None have the infrastructure to take huge numbers of people, but maybe each could take 5,000. But the biggest beneficiary will be New York.’
He adds: ‘I have been told by a number of business people that they have already stopped all investment here.’ And that £71billion in tax revenue will shrink. Boleat points to research suggesting as much as £10billion could be lost in ‘a worst case scenario’ and warns that the City’s finance firms are planning for just that.
‘In the meetings I am in with City businesses, they are not interested in that question – hard or soft – because they have to assume the worst case. They have no choice.’
Thousands of jobs. Possibly billions of pounds in lost taxes. A catastrophe?
Absolutely not, declares Boleat, for while he evidently not a fan of Brexit he is also desperate to see more measured views, on both sides of the debate.
‘There is no point in saying it’s a catastrophe. If you were to say all the banks will leave, well that’s not true. We are being very measured in what we say.’
And he reports that Brexit politicians are also being more measured. ‘We don’t hear Ministers talking about “easy solutions” any more,’ says Boleat with relief. ‘Ministers now know it will not be easy and that there will be some hard decisions.’
He refers to the raft of complex regulation of the City currently intimately intertwined with European institutions. ‘Some politicians said this would be easy, but those at the coal face, in David Davis’s department in particular, realise it’s not.’
The reference to Brexit Secretary Davis is timely. A memo taken by a City of London official during a meeting with Davis, leaked last week and gave a worrying impression of where he stood. During the meeting, held three weeks ago, Davis reportedly showed ‘no interest’ in softening the blow of Brexit for the City through a transitional arrangement.
Davis’ department meanwhile said the memo ‘did not properly reflect Government policy or Mr Davis’ view’. A City of London spokesman said the note was ‘the City’s interpretation of our meeting with the Secretary of State’.
Boleat, who was not at the meeting, did not want to comment further.
But he has a clear message on his hopes for a smooth Brexit. ‘When we say transitional arrangement people think that means a delay, but no, that’s not what it means. You are not delaying, you are making the transition smooth.
‘So we still leave, but there could be a load of provisions that make that leaving less damaging and that could last for 1-3 years. That could be a blanket arrangement – like staying in the single market for three years, or it could be sector by sector.’
Boleat says the Government does now recognise the complexity of Brexit. ‘We think the issues are far better understood,’ he says.
And he adds the work needs to be done by the UK – we cannot expect Europe to do it for us. ‘The ball is in our court. Europe is not going to negotiate until we say: “This is what we want.”’
But he still has fears for the financial sector and its access to European markets and that too much store is being set on trade deals beyond Europe.
‘There is a notion that it will all be fine with a trade deal with Australia. But we know what Australia wants and that is better access for their people to come and work here without being discriminated against.’
Trade deals generally don’t cover financial services. Such deals on goods do not give market access for financial services. They will also not tackle the City’s dependence on financial workers from Europe.
‘About 10 per cent of City workers are from the EU,’ Boleat says. ‘Now, I don’t think we are going to round up the Europeans and chuck them out. No one is calling for that and that is not going to happen. But that still leaves some uncertainty. People will be wondering, can my girlfriend come and live here? What if I leave for a few months, can I come back?
‘We are hearing from a few businesses that it is now more difficult to get EU nationals to come.’
As an example he describes a hypothetical deal which would be hampered if visa controls are too complex.
‘Imagine you’re a bank and you get a mandate to do a government bond issue for Poland. Next week, you could bring over people from Poland from your office or affiliate there. They would come over, work for a month and then go back.
‘But if they’ve got to apply and fill in a 10-page form which is going to be assessed, the answer is you are not going to do it.’
The City is also facing a challenge from continental rivals such as Paris and Frankfurt who have begun marketing campaigns to lure British finance firms to them.
On this, though, Boleat seems unfazed.
‘The French had their poster, “Tired of the fog? Try the frogs!” The Germans had a cocktail party in Hyde Park.’ The 67-year-old shrugs. Such marketing will not make much difference. What will matter is the substance, he argues, and on that Britain needs to make sure its tax and regulation is as attractive to finance as possible.
Boleat, who was born on Jersey, lives in Northwood, North West London, but spends most weekday nights in a flat above his offices. ‘Most nights I have more than one event to be at.
‘Last night, I was at the Queen’s diplomatic reception and it was fantastic. I had a chat with Boris and with four other Cabinet Ministers.’
Boleat, it seems, is very much a politician but he argues it is policy that interests him. ‘I toyed with standing for Parliament in my 20s, but I didn’t stand in the end.
‘My real interest is policy, I hate campaigning. Those people who are in politics because they want power, but haven’t got a clue what to do when they get there...I find that very depressing.’
It seems a particularly barbed point in the current climate. Does he have anyone in particular in mind? ‘No,’ he quickly shoots back. Political campaigning may not be his thing, but diplomacy clearly is.
Businesses have stopped investing here...New York will be the biggest beneficiary