Richard North, 22/06/2018  

A recent speech at the Cass Business School on the future of the City had luminary and self-styled "Brexit veteran" Sir Mark Boleat regaling his audience about how he was "increasingly concerned" about the way Brexit is developing.

Us lowly plebs need to be honoured that such great men are reaching out to share with us that which our mean lives have brought us to confront for some long time now. But, as with the media – for which nothing exists until they have invented it – concerns are of no concern (to coin a phrase) until Great Men have expressed them at some prestigious forum.

According to this Great Man, the City is at the point of no return, although better described as a "window of no return". Brexit negotiations are increasingly irrelevant as international financial services business are taking the necessary steps to provide services in the EU 27 from the EU 27.

Going back to the beginning, "mutual market access" had been the "laudable objective" but Boleat is ready to concede defeat, saying it "has little chance of being achieved", while rightly stating that "equivalence is wholly inadequate".

In fact, there is a way of achieving mutual recognition, but not any one of the highly-paid worthies or their consultants have any idea of how to do it. And since they only talk to themselves, and hire people from the charlatan fringe such as Shanker "snake oil" Singham, they are never going to happen upon a workable solution in a month of Sundays.

The people with the ideas and the answers don't wear the right suits, haven't gone to the right schools and – especially – don't have the necessary prestige. And, as we all know, such things are far more important than being able to identify the problems and come up with answers.

For want of those answers, Boleat is telling us that "leading financial services businesses" will ensure that their customers will not be adversely affected by Brexit. "The City" – which he uses as shorthand for the financial services industry – will be fine after Brexit. But "the City" – meaning the financial services industry in the UK, will be smaller.

In the short term, he says, it will be only marginally so. But in the longer term, it will contract significantly "if Britain remains outside the EEA".

This is an interesting comment. We have a latter-day convert to the EEA, to which Boleat evidently looks for salvation, hoping it will arrest the loss of 75,000 jobs and £10 billion a year of tax revenue. But he does not seem to realise that, although continued EEA participation is necessary for the wellbeing of the UK, it is by no means sufficient to protect the financial services industry.

That apart, the Great Man has some pointed words about "the public debate and the role of business in that debate". The whole Referendum, he says, was deeply damaging to the country, creating divisions where none previously existed and massively increasing the level of intolerance and unpleasantness in public debate in a country which has prided itself on the opposite.

One could argue with that. The divisions were there – simply he and the rest of the Great and the Good hadn't noticed. However, while business (certainly in the form of the CBI) was voluble enough during the campaign, in the current environment, most businesses have taken the spineless route and, in Boleat's words, "have found it wise to sit out the public debate, leaving it to the politicians".

Rightly, the Great Man says, "this is dangerous". Politicians respond to the public debate. If business is not contributing its views it will be ignored.

We now have the position, he adds, "that many businesses are very reluctant to point to the practical problems they are facing as a result of Brexit, or to setting out their plans". Boleat believes "they have a clear duty to be more open, not to express views about the merits or otherwise of Brexit, but simply to explain what the current situation means to them and what their plans are".

The trouble is, as we see again and again, business has no more of an idea about what to do than the politicians. Boleat says they need to be talking to their MPs and local councils and to the media. And, nationally, the major companies and the trade bodies should be doing the same.

He even calls in aid Paul Dreschler, outgoing President of the CBI, who made this point in his valedictory interview with the Financial Times earlier this week. "If you do not speak out now, do not say in three years' time that this is a terrible mess".

But this is the CBI which sees its salvation in staying in the customs union, and has been mealy-mouthed about staying in the EEA. And as to the add-ons which have to go with the EEA – such as those necessary to rescue the financial services industry and the aviation sector (to say nothing of the others) it is totally silent.

Business, says Boleat, "cannot simultaneously complain about the poor quality of political debate and decision taking but not play its part in improving the situation". And while he may be right (in fact, he most certainly is right), he needs to recognise that industry itself needs to crawl out of its hole and up its game. It can play little role in improving the situation if it hasn't the first idea of what is needed.

Boleat thinks "the evidence points to Britain remaining in the EEA in the short term" and argues that "there is much to do to transform the evidence into a state when it can have a decisive influence on policy-making".

That "evidence", however, goes back more than four years. While he is struggling to catch up with the basics and getting stuck into Janet & John concepts, our thinking and understanding has developed in leaps and bounds. The EEA is not the end. It is scarcely the beginning – and the Great Men are not even past first base.

And so we see on the front page of The Times a report that Airbus is on the brink of abandoning the UK as a result of Brexit, "because of worries that EU safety certification will not apply from March next year".

This, of course, is something we wrote about in November last year, confirming the problem in December. But we're only a blog so none of the legacy media took the blind bit of notice. When the mighty Times discovers the problem, though, it goes straight on the front page.

Be aware though, you can read more and in greater depth on this blog, without having to get round the paywall. Specifically, what The Times isn't saying (probably doesn't know) is that Airbus is regulated by EASA. It is not directly affected by Brexit. Its certification will remain valid after we leave the EU. 

Even in the UK, therefore, its problems do not lie not with its own operations but with its suppliers, many of which come under Civil Aviation Authority and will no longer be certified come Brexit. Moving Airbus operations out of the UK will not solve this problem. There are limited work-arounds, but you would have to read this blog to find out about them.

More to the point, there is a long-term solution. There is no need for Airbus or any aerospace manufacturing to be at risk, and if the government was handling the negotiations properly, there would be a clear pathway to a final resolution and no uncertainty. Instead, government listens to the likes of Singham and we get chaos as a result.

But there is no more indication that aerospace manufacturing is any more up to speed than the financial services industry. The Guardian reminds us that, in March, Katherine Bennett, the senior vice-president for Airbus in the UK, told the BBC Radio 4 Today that she welcomed Theresa May's intention for Britain to remain a member of EASA. Yet this is no more an option than Mrs May flying to the moon.

Oddly enough, the solutions for the financial services industry and aerospace manufacturing are not entirely unrelated. There isn't, as the bleating Times avers, a case where, in aviation, the "manufacturing base can be protected after Brexit only if the UK in effect remains inside a customs union and the single market for goods". Aviation safety certification lies outside the immediate scope of the Single Market and we need more than that.  The EEA is necessary, but not sufficient.

But then, the mere author of a lowly blog couldn't possibly know that, and can't have anything worthwhile to say, or I'd be all over the media. Thus, despite their lacklustre performance to date – and the increasing evidence that they couldn't lead us out of a paper bag - I will stand back in awe and wait for the Great Men to deliver us from disaster.

We lowly plebs know our place and will wait for the cue to applaud the brilliance of our masters.

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