As a Brexit supporter, I naively thought that the City would find ways of emerging relatively unscathed from leaving the European Union.
Even if there were an exit of some jobs and asset management mandates to Frankfurt, Paris and Amsterdam, the trading and innovative skills of Britain, in areas such as financial technology, would keep it ahead of the pack.
Be that as it may, it is tremendously worrying that so much government bandwidth has been spent on fishing, state subsidies and farming, and that a durable financial services deal, reliant on mutual recognition of regimes, was not established.
Britain’s financial services sector represents up to 7 per cent of the nation’s GDP and generates big invisible trade surpluses with the Continent
The only substantive accord is around clearing of derivatives, and with £47 trillion of open contracts that proved a necessity since Brussels and Frankfurt were cool on taking on such risk.
The new Financial Services bill just unveiled, together with a ‘dear CEO’ letter from the Bank of England and the FCA to significant financial groups, are part of an effort to demonstrate that the UK will maintain rigorous standards.
But the measures are something of a patchwork more concerned with opening bridges with the rest of the world than building ‘equivalence’ with Europe.
The failure, for instance, to establish mutual recognition of bank passporting rules means that it is a case of ‘every bank for itself’ in terms of maintaining client relations, raising funds and doing bids and deals from London.
It is possible that the laissez-faire approach will work and that, as in the 1970s when the Eurodollar markets established themselves in London, a lighter-touch flexible regime will win out.
But it is a big gamble for a sector that represents up to 7 per cent of GDP and generates big invisible trade surpluses with the Continent.
Nor is it that clear that City rules are quite so accommodative as the UK likes to think. The reason that Vodafone decided Frankfurt was the right place for its telecoms ‘Towers’ float next year is because London Stock Exchange rules would have prevented it becoming part of the FTSE indexes because of domicile decisions.
The UK gets the Hut and Germany gets 21st century infrastructure. That’s not a good trade.
Return to sender
If there is anyone who still believes anything Donald Trump has to say, they will know that he doesn’t regard the US Postal Service as best in class, particularly when it comes to voting by mail.
One thing that it does do, which is alien to Royal Mail, is that when it makes daily deliveries it also does pick-ups.
So for residents who have stamps to hand, a trip to the mail box or local post office can be saved.
It is fascinating that Royal Mail, which regards its parcels service as the road to salvation as snail mail declines, is going national with a trial scheme to pick up packages from people’s homes, for a relatively small charge of 72p plus postage costs.
Innovation is slow at Royal Mail, which has troubled labour relations with employees who have done such sterling and brave work during the pandemic by keeping us connected to family, friends and the outside world.
It has struggled with its version of track and trace, which placed it at disadvantage to other private rivals.
If the Royal Mail can get that right and smoothly implement home pick-up, it would be a huge advantage in turning the business around and helping to make last mile deliveries more economic.
Post Offices might be relieved, too. Anyone visiting their local post office in recent times will recognise that online shopping has turned them into parcel depots.
Even though returns dropped off during lockdowns, customers have to fight their way through piles of boxes and parcels to reach counter staff.
As long as insensitive executives do not use the new Royal Mail service as an excuse to close offices – a lifeline for many elderly and infirm people – we should applaud the new service.
Nestle, owner of very sweet but emblematic chocolate brands Kit-Kat and Quality Street, is rapidly moving in other directions with investment and growth in pet foods and health sciences.
This has led to speculation of a £23billion confectionery carve-out, leaving it less exposed to sugar. It could be a chance for Britain and its nation of chocolate eaters to reclaim a bit of its heritage.