The Governor of the Bank of England. Jamie Dimon of JP Morgan and many other foreign bankers. Fearmongers in general. Their support for Britain remaining in the European Union won’t soon be forgotten.
Certainly, that’s the impression from speaking to Andrea Leadsom MP, the minister (and former City minister) who is one of the most fearless voices in the Leave campaign. Her outspoken comments indicate how deeply the debate – or should that be bitter argument? – over Britain’s future has caused a rift in public life, in particular with the Brexit camp believing that the establishment has closed ranks to oppose them.
If the British public, however, backs Brexit, then Leadsom and her colleagues will be in the political ascendant. In a broad ranging interview, one phrase that Leadsom certainly doesn’t use is ‘let bygones be bygones’.
As a start, Leadsom wants Mark Carney brought before the Treasury Select Committee to explain why he betrayed the Bank’s rules of impartiality after warning of the dangers of the UK leaving the EU. Leadsom says the Governor must be held to account. “Carney knew exactly what he was doing when he warned leaving the EU would lead to sterling falling and growth stalling. What he said is beyond his legal remit of impartiality.
“He has absolutely damaged the Bank’s reputation for independence and betrayed the Bank’s raison d’être, which is to ensure market stability. He has independence on monetary policy but in all other areas he should be impartial.”
What’s more, she says Carney achieved the opposite by triggering a self-fulfilling prophesy in upsetting the markets. “He has no evidence for his warnings and has encouraged financial instability. What he said about the impact of a Brexit is unproveable. He cannot know that households will stop spending or how they will behave. He only gave one side. It’s also rubbish to suggest the currency will collapse. That’s a partial view.”
The Canadian-born former Goldman Sachs banker liked to portray himself as a cautious figure above the fray of party politics. However, his stark warnings on Brexit – among them his comments in early May that a vote to leave risked “a technical recession” – have left him in the middle of the mudslinging. Carney’s warnings were seen as more credible than those of government ministers – and therefore having more impact on the referendum.
On June 15 four senior former Conservatives wrote a letter saying the Bank was among the bodies “peddling phoney forecasts and scare stories”, while a forthright letter from Bernard Jenkin MP, another prominent Vote Leave campaigner, drew a three-page response from Carney in which he said Jenkin hadn’t properly read his remarks.
Carney has already defended his remarks once at the Treasury Select Committee, where he said: “We have not supported one side. We have supported low and stable inflation.”
A Bank of England statement in response to Leadsom’s remarks said: “The Bank has a duty to report our evidence-based judgments to Parliament and to the public.
“Assessing and reporting major risks does not mean becoming involved in politics; rather it would be political to suppress important judgments which relate directly to the Bank’s remits and which influence our policy actions.”
But Carney is not the only person in the Brexit camp’s sights. The energy minister and former City minister is just as livid with Dimon, chief executive of JP Morgan, who when visiting his troops in Bournemouth in June, warned that 4,000 jobs could be lost after a Brexit. “The intervention of Jamie Dimon is outrageous. This is the same bloke who oversaw a bank, which, with deliberate falsification in the mortgage-backed bond market, helped cause the financial crash, leaving thousands of people poorer and without jobs.”
Referring to the US bank’s record $ 13 billion settlement with US regulators in 2013 over pre-crisis mortgage bonds, she said: “This is the same bank which was fined £8 billion by the US SEC for its involvement. Now he is telling us what we should do in our country. Why should we listen to him?”
Leadsom explains the high-minded interventions of US banks like JP Morgan – which didn’t comment by the time of publication – and others as “pure self-interest. Indeed all businesses are acting out of self-interest to some extent, even those who are for coming out [in favour of leaving the EU] like Dyson and JCB. ”
She has form when it comes to dressing down bankers, having given Bob Diamond of Barclays a drubbing for his role in the financial crash and having campaigned for the break-up of banks such as RBS after the crisis.
“There’s no doubt in my mind the big banks and big business want to preserve the status quo to keep life easy for themselves. Brexit is not convenient for them.”
We catch up by telephone because of a jam-packed media diary, including debates in Westminster Hall and Mumsnet interviews, not to mention the prime-time ITV debate where she was chosen to stand shoulder to shoulder with Boris Johnson, one of Brexit’s biggest beasts, in front of a tough live studio audience.
As usual, she’s on full throttle when it comes to damning the EU project. But also sad because of the recent death of the brilliant Rodney Leach, a close friend and her mentor since setting up the Fresh Start Project, the cross-party group she created to lobby for EU reform.
Like Leach, whose Business for Sterling lobbying group did so much to keep the UK out of the euro, she would have preferred to reform the EU from inside and only reluctantly chose the nuclear option after David Cameron’s failed negotiations. “That was my ‘road to Damascus’ moment.”
The gathering support for Vote Leave in the country and the City – until recently dominated by mainly foreign bankers’ braggadocio with their warnings about job losses – doesn’t surprise her one bit.
“It was a clever tactic but a lie.” The biggest lie of all, she says, is their claim that the City and the financial services industry would be destroyed by leaving the EU, that banks would shift to Frankfurt and Paris to do their trade, leaving the Square Mile withering on the vine.
“The most ludicrous red herring they keep repeating is the passport one. I don’t believe these banks can’t afford – or don’t already have – a subsidiary in an EU country from which they can use their passport. And when Mifid II comes along, there will be regulatory equivalence anyway. So that shoots that fox.”
Leadsom has more foxes to shoot. And her aim is on target, having worked as a trader and banker through all the big ‘systemic’ crises of the last 25 years, from the ERM crisis to the Barings collapse to the Asian crash.
“There are only four global centres – the City, New York, Hong Kong and Singapore – that count. More foreign exchange is traded in the City, more eurobonds and more dollar trading than anywhere else in the world. Our contract law is the best, our infrastructure is second to none and we have the language of finance.
“Threats that Frankfurt or Paris could replace London are nonsensical. What I hear from French bankers is the opposite – they worry that they won’t get access to our capital markets.”
Her preferred option in a post-Brexit world would be for the UK to forge a new ‘British’ Free Trading Agreement direct with the EU, allowing the UK to make bilateral trade agreements with the rest of the world.
“The scaremongering that it will take years to do deals is another red herring; we are not like Canada, which hasn’t had a relationship with the EU before. Every bit of EU law is enshrined in UK law, so nothing will change for at least two years while we negotiate the ongoing tariff-free trading with our EU neighbours.
“I cannot believe that Merkel or Hollande will punish us with a trade war for leaving, as their industries depend on us for exports; we are a huge market for them. They both have elections next year and punishing us for going free is hardly going to go down well with their voters. As far as one can say, we are not going to put up any tariffs against them, so I don’t see why they would want to against us. For a start, the car manufacturers won’t let them.”
By contrast, she says, leaving the European Union Customs Union would allow the UK to expand exponentially by opening up our trading partners and negotiating bilaterally with new nations – the 80% of the world outside the EU. “Some of the UK’s greatest industrialists like Sir James Dyson and Lord Bamford of JCB have all said the EU hampers their business and that we would be better off. Hard to argue with that.”
And we will have fairer trade. “The EU operates a protectionist policy; we give subsidies to coffee farmers in Africa but then charge 30% tariff on their products. How mad is that?”
I can almost feel the smoke filtering through the phone line when she hits back at the little Englander charge always meted out to Brexiteers. “You know this makes me so angry. I love Europe, we are intrinsically linked to European culture, but leaving the EU doesn’t mean that will change. I speak fluent French and spend a lot of time in Portugal where my family has lived for years – the fish market in Quarteira in the Algarve is one of my favourite places in the world. It’s so wrong for them to say that outers are anti-European.
“But I loathe and detest the EU and what it’s doing to my country. And, yes, you can print that. What the EU, and the northern members, have done to the southern European countries like Greece and Spain with their policies is truly outrageous when you look at what’s happened to their economies and their high youth unemployment. It’s an outdated, elitist and protectionist regional block. It’s stopping us from doing serious business and trade with the rest of the world.”
One issue looming large for all politicians in the front line of the mudslinging is how they can return to their party groupings on June 24 after so much personal bitterness during the campaign. How will she feel if the Remainers win by a squeak? Will her outspokenness have damaged her position? “I don’t worry about that. I have a debt of gratitude to David Cameron for allowing ministers and MPs to speak out. I will die happy knowing I have spoken my mind, and done my duty.”
There is, of course, an alternative. Should there be a Brexit, Leadsom is tipped as a possible Chancellor, thus helping choose the next Governor of the Bank of England. Or would she prefer to be negotiating those new trade deals as the new Europe minister? Her French would come in handy. She laughs and says: “No comment.”