All you need to know from the world of Brexit this week.
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1) Theresa May Has Told The World’s Elite They Need To Learn To Share Or They Will Be Brexited By People As Well
Theresa May clearly loves a speech. After setting out her Brexit plans on Tuesday in London (you can read my other Brexit Briefing about that here), she flew to Davos in Switzerland to give the international version to world leaders.
This one was a bit more ask-not-what-globalisation-can-do-for-you-but-you-can-do-for-globalisation.
May told the World Economic Forum that more needed to be done to look after the little guys and gals who haven’t done as well out of globalization as they had.
Together with her commitment earlier this week to pull the UK out of the world’s largest tariff-free market, the spectre of protectionism reared its head.
Fear not though, warned May. She wasn’t going to start whacking up trade barriers. Instead, she wants to “harness the forces of globalisation so that the system works for everyone, and so maintain public support for that system for generations to come.”
2) Philip Hammond Has Threatened To Really Make A Success Of Brexit, But He’s Willing To Be Talked Out Of It.
After managing to scoop his boss on Tuesday, Chancellor Philip Hammond addressed delegates at Davos a good few hours after Theresa May had finished speaking.
The Chancellor, who is viewed as even more of a pragmatist than the Prime Minister, warned the EU not to let “political retribution…triumph over economic logic.”
He doubled down on his comments from earlier in the week that the UK could slash corporation tax in order to attract businesses if the EU started playing hardball over a free trade deal.
“That is not a threat, it’s a statement of the blindingly obvious.”
What he didn’t explain however, was how the Treasury would fund these tax cuts. In 2015/16, some £44.4billion came into the Government coffers from corporation tax.
The tax rate is already set to drop to 17% by 2020 – drastically lower than the 30% in Germany and 33% in France, but still higher than the 12.5% of Ireland. If Hammond really wanted to undercut Dublin, he’d have to go to around 10% - which could cost the Treasury tens of billions of pounds.
The other weird thing about this is Hammond is saying: “If you don’t give me what I want, I will be forced to really make a success of Brexit by getting all the best businesses to come to the UK.”
If it’s that bloody easy, just do that anyway, surely?
Maybe it’s not.
3) World Leaders Who Were Against Brexit Are Still Not Convinced It’s A Great Idea
With so many world leaders in one place, there have been loads of sound-bites about Brexit escaping from the Swiss ski resort.
IMF boss Christine Lagarde told the BBC there was likely to be “pain” for the UK as Brexit kicks in. As someone who wanted the UK to stay in the EU, Leavers will probably adopt a “she would say that, wouldn’t she” attitude to the comments.
The Dutch Prime Minister Mark Rutte adopted a similar theme, warning the UK “will be impacted negatively by the fact that it will leave the biggest market in the world.”
Italian Finance Minister Pier Carlo Padoan seemed was in a slightly more reflective mood, saying that in fact “the problem with Europe, is Europe.”
“In many, if not all, European countries there is a tendency to say our problems are generated in Brussels or Frankfurt,” he went on, “Europe used to be the solution to many of the problems of the laggards of European integration. Now this is being turned around completely.”
4) Maybe We Can Use The Empty Bank Buildings To Solve The Housing Crisis
A lot of hot air is being generated in Davos, but some is worth paying attention to more than others.
HSBC had already indicated it was planning to move 1,000 staff out of London if much-coveted passporting rights – or their equivalents – are not protected post-Brexit.
Speaking to Bloomberg TV in Switzerland, the bank’s chief executive Stuart Gulliver said the total movement out of London could account for 20 per cent of the bank’s revenue.
According to German newspaper Handelsblatt, Goldman Sachs is also considering scaling back its London operation, with up to 1,000 staff set to be relocated across the EU, mainly in Frankfurt.
It’s also been reported that Barclays and USB are preparing to up at least some their sticks and head to the continent.
Many who backed Brexit won’t give two-hoots if the banks up and leave, as their motivation was to get back control of sovereignty and immigration.
Maybe after Brexit we can use all the empty office buildings in to City to solve the housing crisis.
Except of course there won’t be a housing crisis, as that was caused by immigrants, and we won’t have any more of them, right?
It’s all going to work out perfectly.