We use cookies to track usage and preferences. See Cookie Policy
Pocketmags Digital Magazines
IT
Pocketmags Digital Magazines
   You are currently viewing the Italy version of the site.
Would you like to switch to your local site?
Digital Subscriptions > Prospect Magazine > September 2016 > Capital flight

Capital flight

The City of London will decline outside the European Union—and Britons will be the poorer for it

“Brexit frees us to build a truly global Britain,” enthused Boris Johnson in his Telegraph column immediately after being appointed Foreign Secretary. If anything presently embodies the vision of “Global Britain,” it is the City of London, that marvel of a world-leading, cosmopolitan, ferociously competitive and efficient financial centre that serves as a powerhouse for the entire UK economy. But just as the City owes much of its current awe-inspiring prosperity to European integration, the brutal realities of Brexit will make it shrink, not thrive.

All this is bleak news, not just for the City but for the national economy. London’s financial sector is a huge generator of tax receipts for the government: according to the City of London Corporation, in the year to March 2015, the City paid £66.5bn in tax, equivalent to almost two thirds of the national education budget. It also provided revenue and profits for innumerable non-financial businesses, not to mention easier access to capital for many UK companies. For all the anger directed at fat-cat financiers, their mass emigration will do the nation no good. The reason, in a nutshell, is that the European Union’s single market has always been much more than a free trade zone. From its very inception as the 1950s European Coal and Steel Community, the EU has been about removing “behind-the-border” barriers to business and creating a single economic space regulated by supranational authorities. (This is why EU-level competition policy is so central to the whole project.) Deep economic integration goes hand-in-hand with supranational administrative capacity, especially in economic sectors that require intrusive public oversight, such as regulated services and especially finance. As Dani Rodrik, the Harvard economist, put it in his 2011 book The Globalisation Paradox: “Markets are most developed and most effective in generating wealth when they are backed by solid governmental institutions.” The EU project, for all its twists and turns, can largely be summarised as applying this insight to a continent-sized region. The fact that the single market vision is still far from fulfilled, especially in the service sectors, does not invalidate the logic of deep integration.

READ MORE
Purchase options below
Find the complete article and many more in this issue of Prospect Magazine - September 2016
If you own the issue, Login to read the full article now.
Single Issue - September 2016
€4,49
Or 449 points
Annual Digital Subscription
Only € 3,25 per issue
SAVE
41%
€38,99
Or 3899 points
Monthly Digital Subscription
Only € 3,49 per issue
SAVE
36%
€3,49
Or 349 points

View Issues

About Prospect Magazine

In Prospect’s September issue: Paul Johnson argues that there is no getting away from the fact our economic prospects have got worse post-Brexit. Paul Wallace attempts to outline how the government will try and deal with that situation, while Nicolas Véron suggests that The City of London will decline outside the European Union. On a brighter note, Clive James explores what we can learn from the television show Mad Men. Also in this issue: Patience Wheatcroft, the Conservative peer, suggests that Brexit might not be a done deal with a rebellion in the Lords possible. Thomas Chatterton Williams explores the work and Beyoncé and argues that black artists are failing to say anything profound and James Dyson outlines how he would rule the world.
Modalità di pagamento Pocketmags Payment Types
A Pocketmags si ottiene Fatturazione sicura Ultime offerte HTML Reader Regali Loyalty Points