In These New Times

A new paradigm for a post-imperial world

The new Mrs T and the City

Posted by seumasach on July 5, 2016

Cailean Bochanan

5th July, 2016

It seems that Theresa May’s victory is not so certain after all. Andrea Leadsom, the self-proclaimed successor to Mrs Thatcher, is all the rage amongst the rank file Tories. Her victory would certainly have repercussions. In Scotland the reincarnation of Margaret Thatcher as prime minister would certainly constitute that”material change of circumstances” that would trigger a new referendum on independence. In fact, a referendum would be unnecessary: a unilateral declaration of independence would go unopposed.

However, she is the darling of the eurosceptics, despite quotes from a few years back in which she pledges her support for the EU.

Speaking in 2013, she told the Hansard Society’s Annual Parliamentary Affairs Lecture: “I’m going to nail my colours to the mast here: I don’t think the UK should leave the EU.
“I think it would be a disaster for our economy and it would lead to a decade of economic and political uncertainty at a time when the tectonic plates of global success are moving.

The question why she changed her mind is an interesting one and crucial to understanding the peculiarities of the Brexit process.

Leadsom’s has close links to City interests having worked for Barclays and held senior posts in City Hedge Funds. Since entering parliament it 2010 she has been associated with attempts to reform the EU. She helped set up Fresh Start Group(FSG) aimed at EU reform and in 2011 and was already sitting on Commons committees discussing the vexed question of EU regulation of financial services. She was  concerned that:

“Since the crisis there has been an EU tendency to propose measures that would limit and shut down the success of UK financial services.”

However , she continued to work as a “moderate eurosceptic” seeking to reform rather than leave the EU and in 2013 she was still upbeat concerning negotiations with the EU, referring to David Cameron’s “awesome victory” in securing the concession that a majority must exist among eurozone countries and separately among non-eurozone countries to approve any banking union changes.

She wrote in the July, 2013 that the
“FSP also supports the Prime Minister’s call for a more flexible EU. It’s vital that Member States are protected from regulations that they do not support. We are especially concerned about Eurozone “caucusing”, where Eurozone “ins” use their in-built majority to impose rules on its “outs”. In this context, the EU’s determination to secure a cap on bankers’
bonuses relative to salaries, easily manipulated and therefore not supported by the UK, marks a worrying new development, especially since there are over 40 further Directives and measures looming whose purpose appears to be
constricting, rather than supporting, financial services.

This plainly is economic nonsense. The City of London’s massive expertise should see the UK leading the European charge to sell to the BRIC and other fast-growing economies the financial services they need to prosper. The FSP believes that the only certain way of protecting our critical industries is to allow Member States to apply an emergency brake on new rules.If other Member States wish to press ahead with measures affecting banking and financial markets they could do so through enhanced co-operation, but without weakening how the Single Market brings benefits to all.”

But, as she noted, the clouds of EU regulation were gathering. Ironically these changes were prompted by the City itself as it’s leading hedge funds tried to knock out the Euro. The British press insisted that the single currency was unworkable without political, fiscal and banking union and the EU got the message. The EU, more precisely, the Eurozone didn’t stay still: they reformed themselves- a process which, by another irony, we have just given a huge boost by voting for brexit.

For Leadsom the key moment would have been Cameron’s failure to negotiate opt-outs, to get the right “to apply an emergency brake on new rules” on financial services and to get exemption for Britain, as a country outside the eurozone, on the single market rule-book. Leadsom didn’t change at all, the EU did. But from her point of view, as she put succinctly a couple of days ago in an interview on Sky News:

“It was very clear that the EU was just not reformable.”

And that is also why neocon, permanent revolutionaries Michael Gove and Gisella Stuart headed the Leave campaign.

If it can’t be reformed it has to be overthrown

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