source: Le Nouvel Obs
authors: Sophie Fay and Baptiste Legrand
translation: doxa-louise
Will the post-Brexit United Kingdom become the world’s
largest tax haven?
Dissensus moment. Theresa May’s right-arm man, David Lidington, and
journalist Marc Roche give the Nouvel Obs their respective views on the
matter.
What might the United Kingdom look like post-Brexit? The Nouvel Obs
discussed this burning issue, separately, with two contradictory advocates.
David Lidington, number two in Theresa May’s government, takes a
conciliatory view: ‘The United Kingdom and Europe will continue to work
together. They must construct a new relationship that remains economically
profitable for both’, he advances.
However for Marc Roche, correspondant for the French press in London,
‘the country will come through Brexit very different and dangerous for
Europe, as it will be more offshore, less egalitarian and because it will have
disposed of all migratory problem’.
A few of their answers are contrasted below.
« Ireland »
We find ourselves seven months from Brexit, next March, and still
no sign of an agreement between the United Kingdom and Europe.
Why is this? Is Ireland the unresolved question?
David Lidington: I believe we are at the 80% mark towards an accord.
The major yet unresolved issue is the precise mechanism of the security
measure at the Irish border [the ‘backstop’: Brussels wants to guarantee
that there will be no return to a physical frontier between the two
Irelands, NDLR]. We could come to a provisional solution, good to the
end of 2020, as we await the coming into force of our next partnership. I
feel confident, and the British government is as well, that we will reach an
agreement this autumn.
Marc Roche: The problem comes from the fact that Theresa May’s government
needs, for its majority in Parliament, the Northern Ireland protestant unionists,
of the DUP. A solution will be found because no one wants to endanger
peace accords by creating a hard frontier between the two Irelands, but
especially because the demography is such that, in the very short term, catholics
will become the majority in the North. And they are militants for reunification
with the South and will play the card of only one Ireland. Many Brits who have
never set foot in Northern Ireland don’t care. I have never met, in my time in London,
anyone who had been to Belfast.
« Tax haven »
What will the post-Bresit UK be like? A gigantic tax haven?
David Lidington: The Chequers Plan [from the name of the city where the
May government held a seminar, NDLD] carries very clear guaranties,
on questions such as social standards and environmental guaranties. I believe
these should re-assure our European partners. In any event, these are social and
environmental norms which the British people want for themselves.
With respect to financial services, we suport a system of enhanced
equivalence[...]. We are working towards the highest possible guarantee to
protect our own consumers.
I can even cite examples where we have gone further than European norms.
With respect to the required capitalization of banks, the EU has agreed to
a set of minimal norms. We have held out to reinforce the requirements for
capital base funds, because we wanted British taxpayers to be fully protected
from the risk that comes with investment banks.
Marc Roche: The United Kingdom is already a tax haven! Here is proof:
Roman Abramovitch, the Russian oligarch, was allowed to sell the Chelsea
Club he bought with dirty money from the pillage of the USSR without any
questions asked. Given its network of offshore zones in British overseas
territories and ex-colonies of the Crown, this is already the largest tax haven
and the City lives off negotiation and treatment of funds brought back from
these zones. One third of the world’s tax havens are British.
What will change after Brexit? Freed from European regulation - but not from
international regulation from the OECD, the G20, the Bank for International
Settlements -, the London exchange can only prosper. The limitations on bonuses
to bankers will be lifted. Little activity will be transferred to Paris or Frnakfort.
No bank, except for HSBC toward Paris, has delocalized many jobs. It is a
question of tens, hundreds at the most. But, mostly, emergent countries, in
particular China, will feel very much at home in the post-Brexit United Kingdom.
London will become the financial market and the Trojan horse for Chinese funds.
Starting with David Cameron in 2010, the United Kingdom has been courting China.
It is the only country to sell its nuclear technology to China, [...] The United
Kingdom has been hosting since 2010 Chinese banks with short-circuit of the
protective controls of the Bank of England, to the point where the ‘Financial Times’
has expressed concern about the systemic risks that might be involved.
The City is the only true European center participating in the internationalization
of the Chinese currency, the yuan. And London grants golden passports without
restraint to wealthy Chinese wanting to settle in Great Britain without
question as to the origins of the funds.
« New referendum? »
If negotiations were to fail, and given the serious political divisions in
London,would a new referendum ever be possible?
Davis Lidington: I see no desire for this, either with Labour, or the Conservatives,
to go back in time and replay the battle. And even if we did it: so why not a third
referendum, in a year or two? No, the only sensible thing to do, is to accept
the verdict of democracy, whether we like it or not. And come together.
Marc Roche: There was one referendum and the result was very clear: 52%
vs 48%, with a 12 point difference between the Leave vote and the Remain vote
in England itself, which is the most important part of the country (82% of the
population).
It is thus out of the question that a second referendum be held. Those asking for
one are either has been politicians like Tony Blair, or those of the political class
cut off from the provincial electorate and the pro-Brexit electorate which is still
in the majority, whatever the opinion polls might be showing. A number of Brits
are saying to themselves: ‘Let’s give Brexit a chance’.
« Immigration »
Can the pro-Brexit vote also be explained by a rejection of immigration?
David Lidington: There is no doubt that immigrtion was one of the most important
issue of the campaign. When I went door-to-door, a lot of people expressed
concern. In point of fact, a number of electors could see no difference between
the free circulation of Europeans and immigration from other countries.
Time and time again, they made the point that we could not control the number
of people coming to ourcountry. The question was not whether we should be
more selective or generous, but the feeling that we had no means of controlling
the numbers. This is what motivated a lot of people, even if it was not the only
factor.
Marc Roche: Immigration, after the departure of a high number of Eastern
Europeans, is no longer a high priority issue for Britain. Now, people are
talking about housing, the pro-Brexit future, education, national health,
but no more about immigration. The free movement of Europeans, which
for me was a natural and especially of Eastern Europeans, has finaly shown
itself to have been a negative thing, with hindsight. It was a discriminatory
concept toward those who were not Europeans, all the Africans, Asiatics,
Australians, Americans who wanted to settle in the UK. Which is why a number
of East Indian and voters from India voted for Brexit in disregard of the racist
discourse of a fringe of politicians favourable to leaving the EU.
Formerly minister for European Affairs for six years, David Lidington is a
Minister of State, number two in the government of Theresa May.
London correspondant for the French language press, Marc Roche, Belgian in origin,
has asked for British citizenship. He has published ‘Le Brexit va réussir’ (Albin Michel).
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