Brexit: This is What We Call a Muppet Show

By Clive, an investment technology professional and Japanophile

It’s time to play the music
It’s time to light the lights
It’s time to meet the Muppets on the Muppet Show tonight

– As sung by The Muppets Original Cast

We’re just over a month into the UK’s EU in-or-out referendum campaign. A weary nation wonders to itself exactly how much more it is expected to have to put up with until finally, after what seems eons away, on June 23rd the whole matter can be laid to rest once and for all. Except that, of course, it won’t be, whatever the result.

Articles such as this one tend to introduce themselves with a jaunty “here’s what we’ve learned so far” air. Never one to intentionally mislead readers, we can only honestly respond to this with the statement “not much” (and that’s the polite version).

That said, we will bring regular, or as regular as we have the stamina for, updates on the Brexit referendum and there are a few noteworthy observations to be made. We’ll divide them into economics, media and politics. The UK’s Brexit debate currently contains the worst traits of all three.

The Economics

The Confederation of British Industry (CBI) produced a report from “experts” which made the claim that a Brexit could cost UK economy £100 billion and 950,000 jobs by 2020. But this was the very same CBI that said we should join the Exchange Rate Mechanism, which ended in humiliation for the UK at the hands of the Bundesbank, and also that Britain should have joined the euro which, with the benefit of hindsight, perhaps would not have been the smartest thing to do.

This is typical of the pro-EU business impact analysis which has been produced. It invariably comes from representatives of the corporate, rather than SME, sector. The EU, as a free trade area, tends to benefit bigger enterprises not small ones. Unsurprisingly, then, their proclivities are to support the EU.

As this section is on the economics of a Brexit, in true economist style, on the other hand, we also have the Leave campaign which has also produced its own analysis claiming almost the exact opposite to be true. But as with the CBI’s Leave study, this too is chock-a-block full of assumption and conjecture.

Paid-for think-tank head-scratching often promises more than it delivers, so looking at real business investment decisions, Honda has made inward investment which it says it will continue to do regardless of whether Britain is inside or outside of the EU, with Nissan and BMW saying Britain should remain in the EU to ensure their continued willingness to operate in the UK – the latter getting itself into some hot water by suggesting in a memo to UK employees they should vote to remain. But all of these big corporate welfare queens are much more likely to be motivated by the availability – or otherwise – of “development grants” from a UK government than any loss of competitiveness which might happen as a result of a Brexit.

While that may seem to place blame for crony corporatism squarely on the shoulders of national governments, the EU is in it up to its neck, too. The EU’s mis-leadership often wonders to itself, inexplicably perplexed, as to why goodwill towards the institution has ebbed away during the past decade or so. Well, when it pulls dumb stunts like this shameless gimmie to bribe Turkey’s industrial and political elites channelled through the European Investment Bank and in the process not hesitating to throw another member state’s interests under a bus in order to further a risky and destabilising geopolitical strategy, you’d think they’d be able to figure out that one for themselves.

This does show a perhaps surprising degree of long-term planning and a willingness to implement a set of EU foreign policy goals with not inconsiderable subtly and patience. Unfortunately the goals, being an attempt to neuter Russia’s eastern flank in a Baltic-Ukraine-Turkey pincer movement, are disastrously miscalculated ones. If the EU has implemented policies guaranteed to loose friends and alienate people, it can’t sit there with a face like a slapped arse when that’s how populations in EU countries react.

Still on the subject of corporate welfare, financial services is probably the main industry which would potentially be impacted by Britain leaving the EU. As with manufacturing, you can find information from a variety of sources claiming that either financial services would shrink in response to a Brexit (invariably said like that would be somehow a bad thing) and the reverse being claimed in other so-called research reports. The banks themselves are fairly tight-lipped on the subject.

It should be noted that, for two of the UK’s biggest Too Big To Fail (TBTF) banks RBS and Lloyds, they are prohibited, because of state ownership of varying degrees, from entering the debate. It also makes it impossible for them to go shopping for different standards of regulatory oversight overseas.

For the others, HSBC and Barclays have got other concerns which regular Naked Capitalism readers will be well aware of. And HSBC’s recent fit of pique against the mildest of toughened regulation, which resulted in it publicly announcing that it was going to review the country where it was registered in with Hong Kong and the US being suggested as possible alternatives, resulted in a slightly humiliating climb down when HSBC was forced to admit that when it looked at the possible alternatives to the UK regulatory regime, they did not stack up. One interesting titbit that emerged was that in any move away from the UK, HSBC would not only lose tax offsets but they would also have to crystallise these in one hit when they were unwound. Other big financial institutions will likely find similar complexities lurking under the hood. So talk of a Brexit-induced mass exodus of financial services is likely to be just that, talk.

It is possible that smaller boutique hedge and private equity funds might consider relocating to an EU base country should Britain leave the EU, but again, like the TBTFs, it is hard to make a convincing argument why this would be the case. And network effects along with social factors are much more important to smaller financial players like private equity.

It is hard to overstate how needy and fragile the egos of many highly (read, over) paid participants in the financial service industry are. The effects of sudden, huge, wealth on the human psyche are outside the scope of this piece but can be illustrated by this example.

A TBTF the author is personally acquainted with found itself with a large amount of surplus office space in a building it owned. The building was definitely classifiable as prime commercial real estate having direct river frontage and excellent transport links to London’s infrastructure hubs (mainline rail termini and within the “Zone 1” of the metro system). Steps away from amenities such as the Tate Modern gallery and St. Pauls cathedral, it was hardly in some sort of cultural backwater either.

To fill the office space, routine and unexciting back office jobs were allocated to that building but this just made it even more of a wasted asset and imposed higher costs on the grunt-work operational teams who had to foot the bill for working in such salubrious surroundings. So the TBTF’s estate management department thought it would be a good idea to relocate the money centre operation (mainly corporate and structured finance) away from an overcrowded building much less conveniently located in the City.

The only problem was that their proposed new office building was outside of the City of London “square mile” and on the south bank of the Thames rather than the north. Managing Directors and senior traders from the capital markets team were given a tour and a sales pitch but, according to people who were there, it was like they were being asked to relocate to a mud hut. It isn’t that there was anything particularly wrong with the building as it was – and the promise of a lavish refurb would lift it into the super-prime category.

It was simply that, in the minds of the traders, being exiled south of the river, outside the City and into the perceived wilderness beyond the Square Mile was akin to career suicide. In the corporate and complex financial products market, the TBTF was already clearly not a top-tier player like Goldman or JPM. But at least with a large City base, it could be seen as a serious participant. Turing 500 whiney, spoiled yet strangely insecure bankers into social pariahs by moving out of the City would send a message, whether intended or not, that the TBTF was throwing in the towel in terms of being a serious player.

When people talk about Wall Street, they are not referring to a few buildings in a narrow geographical area. Wall Street creates, and depends upon the existence of, such things as The Hamptons, The Upper East Side, reasonable proximity to the Beltway and plenty of retail opportunities for bored family members with money burning a hole in their pockets to fritter it. The people who work in the higher echelons of Wall Street aren’t about to relocate anywhere else regardless of how much cheaper it is or due to constraints imposed by anything less than existentially threatening regulation.

The same is true for London as a financial centre. While finance is an extreme case, the same dynamic is present for many other industries. For an established business operating in the UK, being in the EU or being out the EU would not be a reason to either relocate or to stay put. And for a prospective start-up or foreign direct investment, being in an EU country or not being in an EU country comes with an associated mix of costs and benefits depending on the factors specific to the business in question. It’s not like there’s only capital formation in Europe in EU countries, or there’s no capital formation happening in the EU at all. It’s a mix. There are successful EU economies and there are EU basket cases. There are successful non-EU economies in Europe and there are European non-EU countries with low standards of living.

In the absences of a balance-of-probabilities standard of evidence, let alone a beyond-a-reasonable-doubt level of economic certainty about the impacts of whether Britain remains in or leaves the EU, the result won’t be decided on the basis of any economic arguments.

The Press

Broadcast journalism has remained balanced on the Brexit debate so, if the regulation of TV news is doing its job properly, it should mean that coverage of the referendum on the main TV news outlets has neither a positive or negative effect on the decision to remain in, or out of the EU. Subjectively, the referendum has not exactly set the airwaves alight as a topic. Without long-form programming to provide deep analysis, we’ve been left with only 5 minute segments way down the news running order specifically exploring what the EU does. So what happens in broadcast media would not appear to have any bearing on the result.

For print media, while this has a not especially significant influence on voters’ politics (fig. 3 and fig. 4) the Leave campaign enjoys a significant advantage. Listed in order of circulation (including online) below are the main newspapers and their affiliations:

The Sun – Leave
Daily Mail – Leave
Metro – neutral
Mirror – Remain
Guardian – Remain
Daily Telegraph – Leave
The Times – neutral
The Independent – Remain
Express – Leave
Star – Leave

But as with any economic argument for or against a Brexit, it is difficult to make a case for how overall the mainstream media will manage to win anyone over – whichever side they are on. And, dear reader, if our trawl through an almost never-ending onslaught of bionic penises, the Kardashian hydra and miracle celebrity diets is anything to go by, the infamous British tabloid press doesn’t deserve to have any influence over anyone. At least one writer was hurt (in the head) during the making of this article, due to exposure to toxic material.

The Politics

Perhaps because, as explained earlier, the economic arguments for the UK to either remain in the EU or to leave are best descried as ambiguous, while the politics of the Brexit referendum have provided lots of entertaining spectacle, there’s been a lot less in the way of convincing reasoning being offered on either the Remain or Leave sides. As all of the main parties have allowed members to campaign according to their own personal views, it’s also not as if there can be appeals to tribal loyalties. Politically, each party has either benefitted or been harmed by the referendum. But that doesn’t mean they’ve managed to convince anyone to be pro- or anti- EU membership.

Let’s look at each of the main UK political parties.

The Conservatives

While the leadership of the Conservative party is pro-EU membership, the majority of local party activists are against it. Polls put nearly 70% of Conservative voters as being anti EU. This fault line mirrors an underlying ideological divide which has always been an influence in Conservative economic policy – what, exactly, is the desirable level of state involvement in society?

The right wing of the Conservative party believes that the correct answer to that questions is “little, preferably none”. If pushed, it would contend that there is no such thing as society as the left would understand it, only a collection of individuals who should be allowed to form whatever arrangements between themselves that they wish.

The left wing of the Conservative party recognises that there are no such things as free markets and that the state will always have some role in managing commerce.

It is highly unlikely that the right wingers in the Conservative party who favour a Brexit are channelling their inner Zsa Zsa Gabor, who once quipped that “A man isn’t complete until he gets married. Then he’s finished” but, in relation to the Conservative economic policy of austerity, the job of implementing it is not going to be completed, the Conservative right believe, until the UK leaves the EU. Then it’ll be all over for the Britain.

On leaving the EU, so many Conservative Brexiters have been led to think, all that inconvenient bureaucracy around maximum working hours, paid parental leave, rights to join a union, end-of-life product recycling, mandatory energy efficiency standards and similar other libertarian dog whistle annoyances would disappear.

But the EU simply does not work like that. Unlike in the US, the EU has no ability to enact federal laws. Instead, the EU passes Directives which member states must then add to their statutes. This means that what might well have stated out as “EU rules” has become British law. Just leaving the EU alone would not repeal the legislation. Any EU Directive-originated UK Acts or Statutory Instruments would need to be repealed in order to remove the EU Directives’ effects.

Just as austerity as a theoretical concept is not too unpalatable to a lot of the electorate but the specific implications of it such as cuts to welfare, reduced public services and privatisations are inedible, the same will be true for “freeing” the UK from EU “interference”. Politically, trying to get bills through parliament removing consumer protection, labor rights, environmental safeguards or mandatory food standards will not exactly be vote winners. But this is precisely what will need to happen to reduce the UK to some sort of Year Zero pre-EU idyll.

For the Conservative party, it is hard to see any positive outcome, whatever the referendum result. If the vote goes to Leave then unless the government moves to enact some pretty incendiary legislation nothing much will change. More likely is that, emboldened by a Brexit vote, the government will be forced into repealing some Conservative third-rail EU Directives which are either quite popular with the electorate or else decimate the lives of some minorities, such as denying the right to UK residency to EU nationals currently living in the UK. If the vote goes to Remain, then the anti-EU contingent of the Conservative party will not go away quietly and forget all about the idea. Especially if the result is close, they will be more likely to re-group, bide their time for a while then try again.

This will likely continue to do lasting damage to the Conservatives. It could not be happening to a nastier party.

The Labour Party

Labour has been lucky so far in benefitting from the referendum. In some respects, it has made its own luck. A broadly pro-EU party with an ambivalent-at-best attitude to the EU leadership might have resulted in the same divisions as are afflicting the Conservative party. But Jeremy Corbyn has demonstrated some of the political acumen he learnt navigating the choppy waters of socialist politics on the left wing of Labour by supporting a leadership party line of being in favour of remaining in the EU, allowing individual members to campaign as they see fit and personally doing nothing more substantive to actually further the Remain cause than to go around the country stirring up apathy. That’s all quite skilful.

The luck has come due to the ability of the Conservative party to fill the void in our lives left until the new season of Game of Thrones starts by providing an ongoing referendum-induced saga involving regal intrigue (Queen Elizabeth II, rumoured Brexiter), ambition (Chancellor George Osbourne), betrayal (former welfare minister Iain Duncan Smith) bizarre-o religious weirdness (Stephen “Pray Away the Gay” Crabb, his replacement), tits (Home Secretary Theresa May) and bestiality (London Mayor Boris Johnson). They’ve given us everything but the dragons. That said, there’s still a few months to go yet so we don’t want to be premature.

Because the Conservatives have provided enough material to keep even the 24-hour news cycle fully fed, Labour has avoided the charge of being ineffective in the referendum campaign on either side of the debate. It has been squeezed to the margins. But that’s like being squeezed out of the race to become the Republican candidate for the presidential race; it really is a blessing in disguise.

The Labour party leadership has noted and wised up to the fact that by crushing any prospect of Keynesian responses to the financial crisis in Spain, Portugal, Ireland and – of course – Greece, turning the entire euro project into an exercise in Bundesbank hard-money corporatist dogma and being willing to fight a US proxy cold-war in the east of Europe, the EU has shown itself to be no friend of the left. We’ll chalk that one up as a success, of sorts.

The Scottish National Party (SNP)

Just when one might reasonably be forgiven for throwing one’s hands in the air and forever despairing of politics the world over, up pops the SNP and reminds us that it is possible for a political organisation to successfully seize huge popular support, electoral success, not-that-bad operational competence in government and – brace yourselves – a genuine left-of-centre economic policy.

The SNP lost the referendum on Scottish independence in no small part due to not doing its homework on the future currency. It will not make that mistake again. What it needs now is another independence referendum where it can learn from previous failure. This requires a plausible excuse.

A vote by England to leave the EU would be perfect. This is why the SNP is MIA in the referendum debate. Where it does get asked in the media to comment, the response is typically that it is very sincere in wanting to fight a campaign stressing the positive reasons for remaining in the EU and will join the Remain group in putting forward strong messages supporting an “In” vote. And once someone, anyone, comes along and says what those positive reasons and strong messages are, the SNP will be right behind them. It then holds up a picture of tumbleweed rolling across the desert.

Alright, we made that last one up. But this accurately describes the SNP’s approach. Given that the SNP does not want to leave the EU and certainly does not want a majority of voters in Scotland to vote Leave, it must tread carefully. The best outcome for the SNP would be a good dollop of Scottish votes to Leave, perhaps enough to tip the balance in favour of a Brexit (thus triggering a call for a new independence referendum), but not in sufficient numbers to make a majority of Scots vote to leave the EU (thereby undermining the case for an independence vote).


Perhaps in the next few months we can look forward to a more forensic examination in the referendum debate about what membership of the EU means for Britain or what the EU’s direction of travel over the next 5 to 10 years might be. So we’d be better able to work out what to keep ourselves hitched up to or, alternatively, want to unhitch ourselves from.

Far more likely, though, is we’ll get more of what we’ve had already – a rather chaotic ensemble cast whose backstage antics are far more interesting than, but completely incidental and unrelated to, the main performance.

All of which leads us to echo the following sentiment:

Statler: Wake up, you old fool. You slept through the show.
Waldorf: Who’s a fool? You watched it.

Lyrics © Sony/ATV Music Publishing LLC, Warner/Chappell Music, Inc., Walt Disney Music Company, Universal Music Publishing Group

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  1. windsock

    Here in London we’re already bored. The consensus among my social circle is that we’re probably Remainers, if only because we don’t trust our own politicians to be out on their own unaccompanied in the wide world. We have no faith in European politicians either, but in a loose-knit group of competing interests supposedly working together under one umbrella, there is some hope that they might keep each other honest (to any degree that is possible).

    The other thing is: Look at the leading Exiters – Farage, Galloway, Johnson, Fox, IDS, Hoey, Field. Yuck. I would not want to be any where that they are.

    But Conservative party self-combustion is always fun. Does anyone have some petrol we can pour on their fire?

    1. Pavel

      I take your point about the Exiters. Boris Johnson particularly is a nasty piece of work (to quote the peerless Eddie Mair).

      But look at the leading Remainers: David Cameron, Tony Blair, Lord Effing Peter Mandelson, the banksters… Do you want to be on their side?

      From my POV the EU started as a noble vision then just got too big and complicated and incompetent and corrupt. Let’s let it break up and start over again.

      Kudos to the author BTW for the very good analysis.

      1. windsock

        No, the Remainers’ cheerleaders are equally repulsive… but in a damned if you do, damned if you don’t situation, you have to go with your gut, and my gut physically heaves at the Leavers while I can handle the nausea induced by the Remainers.

        On another note – I am English, and I am British, but I am also European.

    2. vlade

      Tory self combustion reminds me mightily of Blair-Brown Labour blow up. Except BJ is more charismatic than Ed M ever was, which makes the whole story even more fun.

      Nevertheless, there seems to be a pattern of blow ups of the major parties recently, which should be telling us something, but I doubt that the people who should pay the most attention will..

  2. efschumacher

    It’s hard to know. Britain has actually been ruled by the City of London Corporation since Cromwell did for the Levellers at Burford in 1649, with the screw only being tightened by the formation of the Bank of England after the ‘Glorious Revolution’ when the Monarchy was finally neutered. Vote to Remain and you get rule by Goldman in Europe: Britain serving to mitigate the worst excesses of German hegemony. Vote to Leave and you give the City of London freer reign to squeeze the Peasants further in the way that David Graeber recently anatomized so well in The Baffler.

    It looks like the best course is to secure a foreign income and/or pension, go back and benefit from the depressed exchange rate.

  3. Recovering Banker

    Lynton Crosby indicates most potent argument for leaving is uncontrolled immigration, which is not addressed in this (otherwise excellent) recap.

    1. Clive

      Yes, I did deliberately avoid the whole subject of immigration. For one, it’s impossible to disentangle reporting of it from either the Daily Mail-esque “they’re even coming from Gdańsk to claim our benefits and have babies” or the opposite “you can’t be saying anything about immigration because you’re a racist for even mentioning it” extremes. It has become so polarised that it almost totally obscures any rational analysis.

      For another, EU membership (or not) is an immigration red herring. Immigration has happened historically decades before the EU enshrined the free movement of people in the Single Market. It either would happen, or would not happen, regardless of whether Britain was a member of the EU. The availability of EU labour as a result of EU membership affects the nationality of the immigrants but the numbers of immigrants and the reason for their immigration is a factor of government economic policy. It has little or nothing to do with the EU.

      Taking Japan as an example, Japan has a shortage of younger workers in the labour market but conciously adopts a policy response which, while not exactly discouraging immigration doesn’t encourage it to a meaningful degree either. Make no mistake, there are economic implications to this. But Japan puts long-term social cohesion (which it deems best achievable through cultural homogeneity — I’m not saying this is in any way proven or that I agree with the theory but I merely relay it as the perceived wisdom which drives Japan’s immigration policy) ahead of overcoming a now very skewed demographic balance. Of course, the EU has nothing whatsoever to do with Japan and its approach to migration.

      The reasons why the UK has such a demand for low skill, low wage labour is driven by government economic policy. If the demand is there, then there are EU citizens willing to supply it. But the creation of that demand — or the discouragement of it — is a British government responsibility.

    2. YankeeFrank

      Oooh, we’re not supposed to talk about that or we’re racist.

      I just came from a tech interview at a TBTF in central New Jersey where much of the populace is now made up of H1-B Indian immigrants. The huge open plan rooms I walked through were completely full of hundreds of Indian tech workers. The contractor I may be working for is an old friend who explained that the outsourcing firm that hires all these Indians takes an 80% cut of what the TBTF pays for them. They live, many together, in area housing and of course can’t afford to buy a house or even rent one on their own at what they are paid. Its a somewhat more upscale version of the undocumented Mexican worker paradigm.

      Now I have nothing against immigrants trying to better their lives. But these levels of exploitation, who are they really helping other than the corporations running these rackets?

      I’m just grateful the H1-B program is working out so well for “American” business. I heard a raging winger on the radio the other day — you know, the type that makes Rush Limbaugh seem like a hippie — sensibly clarifying that the H1-B program was designed to bring in workers for jobs that couldn’t be filled by Americans. If our loving government wants to flood the job market with foreign workers earning pennies on the dollar, they should write the “Take Away Jobs From Americans Act” and be done with it. When I start agreeing with freaks like this guy, I know things have reached a major tipping point (and f u to Malcolm Gladwell for coopting this useful term for his garbage analysis). This is one reason I’m disgusted enough that I don’t care if we get another awful Clinton presidency. The whole edifice is on the brink of collapse and I won’t mind one bit if Hillary Clinton winds up taking the blame. Are there that many who deserve more of the blame than the Clintons? I am no winger, but I do understand Trump’s supporters. How long does our government have to suck the vitality out of our economy and lives, all while smiling at us and telling us how its the best of times, before we decide its time to light a match and watch it all burn?

    3. PlutoniumKun

      I don’t really see how uncontrolled immigration has anything to do with Brexit – it was a combination of domestic policy, family connections with the many first and second generation immigrants and international law which has made the UK so attractive for some immigrants. Britain voluntarily opted out of any requirement for work visas for eastern european workers (unlike Germany and other north European countries). Any attempt to put additional restrictions on EU workers in the UK in the event of Brexit would have severe implications for the millions of UKers living in other EU countries. So its not really that simple.

  4. oho

    call me a loon, but otherwise histrionic Daily Mail has been more sensible in its rationales for Camp Leave v. corporate-shill Guardian’s rationale for Camp Remain.

    “, the EU has shown itself to be no friend of the left.”

    just as in the US, corporate-types throws the Left a few bones re. identity politics, the Left looks the other way while the corporate-types loot the hen house—-cuz understanding finance and maths is boring.

  5. PlutoniumKun

    Very good overview, Clive. I agree that the short to medium term impacts on Britain of Brexit have been hugely exaggerated by both sides. In reality, there would be few serious impacts, except for specific regions (such as Northern Ireland), and some sectors (agriculture mostly).

    The one thing though which I think is something of a ‘wild card’ is the approach of the EU. Given that the Conservative government is generally very unpopular in Europe, even within the centre right pro-austerity mainstream, its not beyond the bounds of possibility that there could be a push for quite punitive action by the EU if the UK leaves. It would be quite popular with the public and within European institutions. They might also think it would be worth the cost pour encourager les autres.

    They could, for example, impose a Tobin-type Tax and a enact a major crack down on tax shelters aimed specifically at the City and UK off-shore islands, and its not impossible that Germany and France might reckon they have more to gain than lose by taking a very hard line on things like imports of Japanese cars made in the UK (yes, the UK could retaliate, but that might just escalate uncontrollably).

  6. Marshall Auerback

    Of course, the dirty little secret is that many of those who are in the “Leave” camp are probably hoping that a “Brexit” might be the trigger to collapse the whole monetary union. This might have more resonance were Britain actually part of the euro currency zone (thankfully, it’s not), but the psychological impact could be quite profound.

    1. vlade

      TBH, this could be the reason I’d want to vote yes – although at the same time, I’m more afraid of the political vacuum Europe could find itself in, and all that comes with it, especially these days (and with any of the three most likely US presidential candidates.. of which only Hillary would pay Europe much attention, but hers is the one I could do without).

  7. vlade

    Nice analysis. I’d contend though on the financial services, and the economic impact more generally. UK has deficit in trade goods, but surplus in services (all sort of, think Capita, Menzies etc..). EU market is at least semi-open to services – worldwide, it’s very hard to sell services outside your own country. UK w/o ability to export services is very much stuffed for a period of time. That, on its own, doesn’t mean it wouldn’t be better off out long term, but then you’d have to define what would it actually do, which Leavers are loath to do – the same way, as SNP was loath to deal with the currency. Funny thing is, that I know a number of people who voted “Remain” in the Scottish referendum, but would have voted “Leave”, if they didn’t feel that SNP in effect lied about the currency. They would much more likely take the “blood, sweat and tears” approach than being clearly lied to.

    But back to services – UK financial services aren’t just banks, but also insurance and asset management. Being able to sell that to the EU market is a very large plus for them, and would be much harder outside EU. Think about it this way – Credit Suisse UK is a fully owned subsidiary, regulated by PRA, just so CS has a nice access to the EU market. And that’s coming from Switzerland, with a host of EU treaties. A lot of entities (bank, AMs and insurers) are incorporated in the UK to get access to EU.

    You’re right about the “other” bits, but don’t overestimate them! Someone who commutes four hours a day to London now (say Oxford-Docklands) might be ok to commute 4 hours a day to Paris (or Dublin, more likely), if the other choice is not to have any clients at all.

    I know a few people who already commute between say Switzerland and the UK (because of the schools), and if the pressure on the business is there, people will change. Again, it won’t change overnight, because the middle staff can’t really do this sort of commute financially (well, not daily anyway), and nowhere in Europe you have a pool of people with the relevant financial knowledge this deep as in London. But give it a right nudge, and things will change.

    That said, I know of at least one global bank that is not UK HQed, but runs substantial global business through its UK entity, and is unlikely to change that even with Brexit. So, YMMV.

    1. Clive

      I had to use considerable self-restraint to avoid the temptation to throw in a great many more superfluous Muppet analogies. From the Swedish Chef to PIGS in Space, it was almost too much to resist.

  8. susan the other

    Radar report: Watching PM’s questions monday nite on c-span I got the distinct feeling that Corbyn and Cameron had become friends, so this post makes a bit of sense to me in the context of their polite behavior. I can hardly ever remember Cameron being such a nice guy, so clearly he got stg. he wanted from Corbyn. And Cameron actually responded to questions from the left, re entitlement things, with what almost felt like compassion.

    1. Clive

      It’s always interesting what outside observers think when they look into another country. Now that you mention it, Cameron has gotten all conciliatory in debates in parliament. I put it down to, now that he has Corbyn to contend with, his old rhetoric in lieu of debate approach had started to focus-group badly. He’s too thick to try any 11 dimensional chess strategising. But I’m not sure what he’s up to, to be honest, the conniving little twerp.

  9. JustAnObserver


    One question that’s intrigued me. Considering all the UK citizens who’ve used the free movement of labor to go work in another EU country – do they get to vote in the referendum ? If so do they have to come home to do so ?

    Dunno how many this would effect but I’d hazard a guess that they are in the younger part of the age cohort. So a second question would be: Is there any polling info on how the current support for Leave/Remain break down by age group ?

    1. Clive

      Yes. Expats get a vote (usually posted) as they retained British citizenship even though they’re not residents. They will of course be inevitably Leave voters, but the numbers aren’t likely to me material — unless the result is very tight.

        1. Clive

          The EU-resident ones, most certainly. But it’s pretty much irrelevant to non-EU expats — it’s only going to reflect more-or-less the balance of opinion within UK residents. A Brit living long-term in the US or Australia, for example, would struggle for reasons to bother to vote.

          And even amongst EU-resident voters, that “15 year” rule (see link below) is going to catch a lot out — and those would be the ones who have the most skin in the EU game and therefore be motivated to not only register, but to vote and then to vote Remain. British nationals living in the EU might add a million or so votes to Remain and while it is a factor, it won’t be especially decisive.

          1. vlade

            there’s about 44mil registered voters in the UK. so 1 mil is 2% of votes (and that’s assuming all will vote, which is unlikely, but let’s make it an assumption), which given the current polling (head to head) is a significant number.

  10. templar555510

    It’s the ‘ S’ word stupid – Sovereignty . If we Brits are to stand any chance of calling ourselves democratic then the first step is to vote ‘ Leave ‘ on 23rd June. Fortunately the egomaniacal Gordon Brown kept us out of the Euro so the path to ‘ ever closer union ‘ was stalled for us and by so doing we remain outsiders in all, but name so let’s complete the task and step away from the madness that is the EU.

    1. RBHoughton

      Its not the EU that has removed British sovereignty Templar. Our own parliament has done that quite substantially by incorporating ISDS clauses in all our trade treaties and by falling into unpayable debt. The hand that gives is above the hand that receives. Parliament has a boss over it and its not HM.

  11. ex-PFC Chuck

    Thanks for this informative and frequently amusing overview. It’s a good thing that I’d finished my mug of tea by the time I got to the “stirring up apathy” line.

  12. OIFVet

    If Brexit happens, will Cameron deport Great Uncle Bulgaria? The Wombles just won’t be the same without him. Kidding aside, thank you for the great article Clive. I am going to London in a couple of weeks, it will be interesting to get my friends’ take on the overall vibe re Brexit.

  13. Deep Though

    Thanks for the entertaining article. I hope your writer is recovering well from being forced to read a British newspaper, and that you had correct permissions from your local ethics committee before conducting such an experiment.

    I am thoroughly sick of the whole thing, another 3 months of this crap and I’ll likely pack my family up and leave the planet instead of bothering to vote.

  14. inode_buddha

    I must confess my near total ignorance of recent UK and EU politics. I’ve just been trying to stay alive here in the US. But at the same time I am amazed at how similar the situation seems to be, between here and there. Basically, it seems that the common people get screwed no matter what.

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