Brexit Day in 2019 will come and go and very few will notice. The planes will not be grounded. The lorries will run across the Channel. Trade will continue to flow. The cliff-edge will turn out to be a modest step onto a gentle sandbank.
Nor will the City shut down. Some retail-focused services will require new permissions to market themselves inside the European Union, mostly investment funds open to small investors. These may even partly re-locate: many have for years been registered in Luxembourg or Dublin, though run from London. But the majority of services “exported” to Europe by the City are in reality delivered here.
If a London bank lends money, or sells a derivate, to a German company, the transaction already takes place (insofar as it has a “place” at all) in London and, crucially, is normally documented under English law. That will continue unless the EU seeks to ban its businesses from using financial services based in London (a sanction of the sort normally reserved for the likes of Russia or Iran). But then what will be the effect of that? To make them turn to New York.
Except for a few loudmouth US investment bank bosses jetting in and out of their European satrapies, there are not many now who predict large-scale job losses in the City. And those who do are almost certainly only drawing attention to themselves in the hope of special treatment.
No, the direct economic effects of Brexit on London will be small. What agitates anxious Remainers seems rather to be the consequences for immigration.
That’s very understandable. The London economy has grown to depend on a number of unattractive and unsustainable factors in recent years, predicated on the unlimited availability of low-waged workers, and it is hard to work out what the effects of adjusting away from that may be.
Now, of course, we do not know what the future immigration regime will be. All that Brexit ensures is that it will be decided by our own lawmakers – and indeed that it will change as different political parties get elected to national government on competing manifestos. It may well be a permissive immigration policy. Personally I should be content with that and it is already clear that there is likely to be cross-party support for generous admission rules for those wishing to study here.
But it is worth dwelling on the unattractiveness and unsustainability of the current regime.
First of all it is functionally racist. The advantages of an EU passport are overwhelmingly restricted to white people. I have never heard a Remainer explain why it is right to privilege white people this way while denying a qualified accountant from, say, Zimbabwe a right to work here.
And it is unfair. Remainers never explain why it is right that an Estonian just arrived here is entitled to bring in a Brazilian spouse, while a British person of Pakistani heritage cannot bring in a spouse from Pakistan without very severe difficulties. I am not even sure how many Remainers can see that this might appear an injustice to the many British people affected.
Of course an answer might be that everyone in the world should have a right to free movement to Britain. I doubt the most ardent Remainer really believes that, but in any case that is not about the EU; nor is it what the EU is about.
Leaving aside the racism and injustice of the current EU freedom of movement regime, there are questions about its sustainability. It doesn’t make much economic – or human – sense to employ a PhD in neuroscience to serve lattes. But in fact, as incomes in eastern European countries rise, the opportunities for their people to use their education more fruitfully grow. In time we will in any event have to wean ourselves off cheap labour from that source.
But there is still southern Europe, it may be said: Greece, Spain, increasingly Italy, have seen their economies wrecked by the euro and opportunities for their young people blighted, with no prospect of respite. Their cheap labour will be with us for some years. Well, there is often a silver lining to the misfortune of others, but exploiting it is hardly a moral basis on which to shape the city we all love. And Remainers draw no lessons from the experience of those countries when advocating that we seek to re-enter the EU, a re-entry that by EU law would require us too to commit to adopting the accursed single currency.
Of course there are trades where low-waged labour is desperately needed, like construction. Actually, no. The British construction industry has used cheap labour for years as a means of avoiding innovation and technical improvements. The state of the industry has been well exposed by the collapse of Carillion. Do not imagine that its competitors are fundamentally different: all rely on a business model built around a volatile brew of low margins, under-capitalisation, reliance on cheap labour and dependence on dodgy PFI deals. The industry needs major restructuring to be able to get ahead of its global competitors. Feeding its reliance on cheap labour is wrong, futile and only a means of postponing the necessary changes.
Maybe it isn’t the strictly economic consequences of a possibly more restrictive but fairer and less racist immigration policy that makes Brexit appear to some outspoken Londoners a major cultural watershed. Maybe it is rather the unworthy idea that a narrower, less cosmopolitan relationship with the rest of the world has been imposed on us by less educated, possibly more stupid, certainly more crabbed voters from other parts of the country (leaving aside the 40.2% of Londoners who voted for Brexit).
Well, the world is what we make of it. If we want to be insular, we can be. But the case made by Brexiteers has always been that Europhilia is itself a form of insularity; that a “normal” country, with its own democratic government, fully accountable to the voters for the first time in nearly half a century, can be fully engaged with the whole modern world, taking advantage of the links of language, culture, trade and history that have shaped it.
Londoners can and will step up to that. The more voluble Remainers among them may even be willing to test their global engagement skills by making trial excursions to re-embrace their fellow-voters in other parts of the UK.
Copyright © 2018 Daniel Moylan. Daniel is a senior London Conservative, who held a number of key transport and other posts under the mayoralty of Boris Johnson. His previous articles for On London are here, here and here.
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