“I’m tired of fighting old battles,” said one of Britain’s leading Remainers as he swept past me in the corridors of County Hall. “It’s time to move on.”
Since the Brexit referendum, British politics has been overwhelmingly interpreted through the prism of Remain vs Leave. The coming general election is seen in some quarters as effectively a rerun of that contest, with Tony Blair and friends leading the tattered remnants of Remain in one last, doomed charge against Theresa May’s triumphant Leavers.
But outside of Westminster, it is increasingly clear that the agenda has indeed moved on. If Brexit was a shock to the body politic, the antibodies have started to work.
Yesterday, for example, the great and the good of the business world assembled for the Prosperity UK conference. Spearheaded by the Leave-Remain duo of Sir Paul Marshall and Lord Hill (with support from the Legatum Institute and Open Europe), it was deliberately constructed to be both pro-business and post-Brexit.
Campaigning organisations such as Open Britain and Change Britain were banished from the platforms: instead, the Leave lion lay down with the Remain lamb, as the CBI and Financial Times joined with JCB and Tate & Lyle to discuss how to make Brexit work for Britain.
Over the course of the day, all manner of issues were raised. But one theme which consistently emerged was the extent to which the success of Brexit has nothing whatsoever to do with the deal we get from Europe, and everything to do with what we decide here in Britain.
In one of the early panels, for example, Jes Staley and Douglas Flint – the bosses of Barclays and HSBC respectively – sang the praises of the City.
Staley pointed out that 83 per cent of EU capital markets are based in London, and that Barclays is a massive underwriter of EU sovereign debt. Flint added that an EU desperate to build functioning capital markets would be grievously wounded by cutting itself off from British money and expertise (an over-reliance on banking credit was one of the key reasons for Europe’s sluggish recovery from the financial crisis compared to America’s).
There has been a lot of talk, both said, about banks moving overseas. And some staff will undoubtedly be shifted. But as Staley pointed out, success as a financial centre is not a function of where the banks are, but the talent and capital.
He had recently, he said, been addressing a conference of 500 big institutional investors – the people with the money that moves the market. And not one of them, on a show of hands, was thinking of moving their operations.
It was the same story on the next panel. Michael Spencer of ICAP and now Nex, and Jeff Sprecher of Intercontinental Exchange – a pair of genuine financial revolutionaries – spoke witheringly about Europe’s attempts to seize the clearing business (compared by the other speaker, Patrick Young, to the lungs and kidneys of the international system) from Britain.
All that would do, said Spencer, would be to fragment markets and impose extra costs on Europe – to create a frail, artificial, less liquid euro-only market while the bulk of the business stayed in London.
There was broad agreement – including from David Davis, the morning’s keynote speaker – that Britain needed as deep as possible a trade deal with Europe, with no cliff edges and plenty of time for any new arrangements to bed in. And, indeed, that this would benefit Europe as well as Britain. Suddenly, nobody was talking about “hard Brexit” or “soft Brexit”. They were just talking about Brexit.
But if all present were agreed that it was time to stop fighting old battles, many also felt that it was time to start fighting new ones.
Jes Staley, for example, made an extraordinary claim during his talk: that for his firm, “immigration policy is almost more important than passporting”.
What matters to Barclays, he said, was not the exact shape of the rules and regulations: banks are well practised at adapting to those. It was that his firm would still be able to recruit the people it needed – that global talent would continue to be welcome in London, that Britain’s world-class universities would continue to act as a talent pipeline.
To his credit, that was a point explicitly made by David Davis, too: “A global Britain,” he said, “will continue to attract the brightest and the best.”
But will it?
During one of the breaks, I got talking to a Canadian diplomat. Since Brexit, applications from EU students to study there had shot up by 40 per cent – with a notable spike after the Prime Minister’s party conference speech in October, which stressed the need to control immigration.
On this issue, she admitted, her country’s interests were nakedly predatory. They wanted these bright Europeans who didn’t feel welcome in Britain to come to Canada, and stay there. Not just to benefit their higher education sector, but to benefit the economy full stop.
“The UK university sector is outstanding. Period,” said Ian Diamond, vice-chancellor of Aberdeen University on a panel a few minutes later. But as Nicola Dandridge of Universities UK pointed out at the same event, a very large chunk of our university staff and students are not from here.
In other words, by refusing to make those staff and students feel welcome, and by keeping students within the immigration total – a policy which a solid majority of Theresa May’s own ministers oppose – we are cutting off our nose to spite our face.
And it is not just immigration. The consistent message from the conference was that Brexit will only be a success – that Britain will only be a more prosperous country – if we open up our economy.
Shanker Singham, of the Legatum Institute, spoke about how free trade only mattered if you increased competitiveness at home, via deregulation. Jeff Sprecher pointed out that financial centres across Europe have been promising the earth for a slice of his multi-billion-dollar business, but he’d heard nothing from the British government. There was talk of the need to fix the apprenticeship system, to improve productivity, to overhaul regulation so that it not only keeps us safe but preserves our capacity to innovate.
All of this may, for the moment, be secondary to the need to get the Brexit deal done – to secure a smooth transition to the new environment, while delivering the benefits that voters have demanded (like, for example, a curbing of low-skilled immigration).
But beyond that, this is what the new battle looks like. Not between Leave and Remain, pro-Brexit and anti-. But between those who want Britain to turn back the clock – or even just to stick to the status quo – and those who want to face the future.
In a piece for CapX earlier this month I wrote that the great thing about Brexit will be that we won’t be able to blame the EU for our problems any more. In his keynote speech – beamed in via Skype from Stanford University – Niall Ferguson compared it to a divorce in which you realise that “many of the things you blamed on your ex… are your own problems”.
The choice we face, then, is between confronting those problems and ignoring them. It may be tempting to stick with the comforting and familiar. But the coming fight – the choice we have to make – is between being competitive and ultimately prosperous, or sheltered and ultimately sclerotic.
