 So we're very pleased at the Institute to have Jeremy Brown who is the special representative of the City of London to the EU. I'm sure everybody in this room knows that the City of London is not the same as London and it gets even more complicated than that because it also represents now the interests of financial services centre whether they're in the city of the square mile or down the river or even elsewhere in the UK. But we all know the importance of that industry to them and to us. And Jeremy has been in several European countries already. Now he's delighted to see him here. He's been to the t-shirts office this morning and visited many of the leading organisations so we're delighted that he's come to the Institute. And I noticed my friend and colleague Richard Curran in the Irish Independent this morning and I commend you all to buy the hard copy and pay some real money. But anyway, his message is canary wharf on the Liffey. I don't think so. But obviously while there's going to be no shatten froida about this people do like to look for a silver lining in Brexit that we might get some canary wharf on the Liffey. But at the same time everybody is aware of the risks and dangers of this whole process to Europe, to Britain and to Ireland. So I look forward very much to hearing what Jeremy has to say. He was the Liberal Democrat MP for Tont and Dean from 2005 to 2015. And in that time had several positions. Opposition whip from 2006 to 2007. Shadow Minister for Home Affairs in 2007. Shadow Minister of the Treasury 2007 to 2010. And then in the coalition government he was a Foreign Office Minister to 2012 and Home Office Minister 2012 to 2013. I am called the City of London Special Representative to the EU. And when I took this post a year ago it was originally envisaged that I would be called the Ambassadors to the EU but this was checked with the British Foreign Office and they said oh this is going to be a little bit difficult because the Queen appoints Ambassadors and Mr Brown may have many merits but he hasn't been appointed by the Queen you'll have to come up with another title. So it was then suggested I would be the envoy to the EU and the Foreign Office said this might be a little bit difficult because normally the British Prime Minister appoints envoys and Mr Brown may have many merits but he hasn't been appointed by the Prime Minister. So I said well that's fine I don't mind that much what the title is what are they suggesting instead and they said we'd like him to be the special representative which not only sounds a lot grander in my view than the other two but it sounds like I've been appointed by the United Nations which is not true or at least not yet. But I started this role so as was said my background is in politics not in financial services but I started this role just over a year ago so well before the referendum took place in Britain and the basis of my appointment was that the City of London is a global financial centre it's certainly Europe's global financial centre and just as we communicated as a matter of course with interested parties in the United Kingdom, government, think tanks, media and others given that we were a pan-European centre we ought to be doing that as a matter of course with those audiences across the other 27 member states and with the institutions of the EU in Brussels and Strasbourg and we were doing that but not perhaps in a sustained and systematic way and so I was brought in to add extra capacity and momentum in that regard and I travelled frequently and I talked about capital markets union and digital single market and other single market developments and developments in the Eurozone and banking union and so on and so forth all of which remain of interest and significance to people in London but on the 23rd of June or the early hours of the 24th of June were shunted rather dramatically I think it's fair to say to one side and since then I've talked about almost one subject to the exclusion of all others and that is Brexit and the implications of Brexit for the City of London and for Britain and for the other 27 countries in the EU of which Ireland is interesting and unique because the nature of Britain's relationship with Ireland means that there are factors that are under consideration here which do not apply in the same way or apply at all in some cases in other member states and I've been travelling widely so last week I was in Finland and Sweden I was in Poland and Hungary and on it goes getting a sense of how people see this issue where the pressure points are, where the tensions are and what we can do to try and navigate a course through the negotiations which are not excessively harmful to the City of London but I'd say by extension harmful to the wider economic interests of the other 27 member states of the EU and business corporate interests across the EU and ultimately the individual private citizens of the EU as well now I'm going to go a little bit further than I would feel able to do if I was a minister in the British government because the British government doesn't really have a position at the moment and if I don't make some assumptions we won't have a very fruitful and productive conversation this afternoon so let me make a little, a few sort of working assumptions in terms of trying to think how this may play out seems to me the British government has got a duty to discharge the mandate that was given to it by the British electorate sometimes people say to me, is that really going to happen, that Brexit certainly most people in the City of London, not everybody but most people, most businesses wanted Britain to remain in the EU voted that way, in some cases campaigned that way as well so most people in the City of London didn't want this outcome and most people in the City of London if they had the choice would seek to have a conclusion to the negotiations which was as minimalist and as non-disruptive as possible in terms of the future relationship with the EU looking as closely as it could to the previous relationship when Britain was a fully fledged member of the EU that is fine up to a point but I think there is a danger of the City of London having a parallel conversation with the British government because the British government obviously needs to take the concerns and interests of the City of London seriously we have a strategic importance to the United Kingdom economy but we are one concern of many we're not the only concern the British government faces and the British government has to operate within the context of the politics of the United Kingdom and be sensitive to those considerations so let me go through a few of the assumptions one of them is on timing this comes up frequently as a conversation and will be put out of our misery and due course everyone will get a broader sense of what the timing is but people sometimes say well one of the factors you'll have to consider is the German election and the French election and the Dutch election I was talking to a British parliamentarian last week and he said shall I tell you what election I think the British Prime Minister will be most interested in taking into account the British election and we are due to have a general election unless it happens earlier in May 2020 and I think it would be very difficult for the government to explain to the British public why we are still in the EU in May 2020 four years after the British public voted by a narrow but significant margin to leave the EU I think it would be quite difficult for the British government to explain why people are being invited in June 2019 to vote for their new MEP three years after we've voted as a country to leave the EU as well and there is a natural EU cycle with the Commission and others coming to a conclusion at that point so I think if you work backwards there is some logic I have no insight to this I'm just making observations there is some logic in trying to bring the process to a conclusion in the early to middle part of 2019 and that would mean that if you had a two year timetable you would need to activate it in the early to middle part of 2017 I think also if you work forward there is pressure on the British government to reveal its hand in the reasonably soon sort of medium term I think people understand we have a new Prime Minister in Britain we have new structures of government in Britain this is a very big complex negotiation people don't expect Britain to reveal its hand overnight but I think there is probably some political pressure internally in Britain for the British government not to stall I think it would look odd for a lot of British audiences if we got to June 2017 a year after the referendum the negotiations hadn't even begun a lot of people would feel that that was excessively slow I think there is some pressure in some quarters in the European Union for Britain to get on with it this is seen as a distraction, it is hanging over the EU and people would like to see it resolved or at least the process of resolving it beginning and I think there is an important business imperative and you hear this in the city of London to some extent where people recognise that the government is going to take some time but there is a danger that the political process lags behind the business process and the business decisions that are taking place if you get to the point where people start sort of breaking ranks and making location decisions as businesses because they are getting frustrated about waiting for the British government to actually get the show on the road then the British government has to some extent control of the process and I think the British government would almost certainly be well advised to bear that in mind when it thinks about the timing so all of those suggest to me that we may even get an indication when our new Prime Minister makes her speech to the Conservative Conference next week about some indicators on timing and the broad outlines maybe we will, maybe we won't but this is a process that is lasting months not years before we start the negotiations and maybe by the turn of the year early into next year we will have a better sense of where we are seeking to go then it's the question for the British government about what are the outlines or the toughest sticking points now freedom of movement of people is not a problem for the city of London because we are a global financial centre and we're not really a British centre we're a global centre that's in Britain and we have banks and other financial services institutions from all over the world certainly from all over the rest of Europe but further afield than that and we have people working right up to the very most senior levels from across Europe and across the wider world as well so immigration is not a psychological problem or indeed a practical problem for the city of London although of course the British government might say with some justification that the city of London sees the benefits of immigration and doesn't have to manage some of the harder consequences and they'd probably have a fair point but the reason I'm touching upon this is it's not a sticking point for the city of London or our commercial interests but the British government I think would struggle even if it wanted to to interpret the referendum result as a mandate for untrammeled continued freedom of movement between the rest of the EU and the UK you can look at that referendum that we had in 23rd of June many ways but it's hard to argue that that wasn't a factor in the debate and we have some practical considerations a lot of countries I go to in eastern and southern Europe their public policy debate is around population shrinkage and they have birth replacement rates even in countries which face slightly counter-intuitive like Italy where their birth rate is something like I can't remember exactly but 1.3, 1.4 you need 2.1 to replace population with no immigration so they are wrestling with aging population and declining population issues whereas Britain's population increased by 500,000 last year 350,000 net immigration so we are putting on more than a Republic of Ireland a decade at current rates and I think there are some public policy issues my guess is that the British Prime Minister believes this to be a real issue not a sort of confected issue around cultural change but also around numbers and practical considerations so I think the British government will want to assert itself in this area and I think it will also have difficulty selling to the British public that we the United Kingdom should carry on making the same budget contribution to the EU as a non-member than we did when we were a member of the EU I think for most citizens especially when budgets are tight and other areas of public spending are being squeezed it is a counter-intuitive message that you cease to be a member of a club but you carry on paying the membership fee now the problem with both of those areas is that they are sticking points for a lot of people elsewhere in the European Union and a lot of people say and if you believe them I'm talking a lot of people up to you know Angela Merkel and François Hollande not any old people the people in positions of power and responsibility that it is not possible for Britain to be in the single market unless it observes the so-called four freedoms of which freedom of movement is one and unless it pays a substantial amount into the EU budget and here is where you get the sort of economics and the politics getting out of sync with each other because it is clearly in the interest of both Britain and the EU 27 that there is as much access in both directions in trade and single market issues as possible and this is more keenly felt in Ireland than it is in any of the other members of the EU 27 Ireland does more trade as you would expect with Britain than it does with any other country in Europe the British Isles including Ireland is in many ways a single economic entity in terms of supply chain management of businesses they have a single business model in some cases they are not separating out the Irish part of their operations and of course we have a historical agreement on movement of people which means quite often people across Europe say how come those Irish people got to vote in your referendum and none of the rest of us got to vote on it because our franchise was the same as the general election not the European or local elections so it was limited to people eligible to vote in the general election but that obviously included Irish citizens but not French, German or any other Europeans so there are particular Irish considerations in terms of trying to make sure that we have as least disruptive outcome as possible in commercial terms to this separation that is going to take place and I view this as a possibly a rather crude way of looking at it but why not try and strip it down to the basics I see a sort of spectrum where on one end we have people in this debate in the EU whose principal motivation is political and whose response to the referendum result was highly emotional and you have people on the other end of the scale whose principal consideration is economic and whose response to the referendum result was primarily pragmatic and the reason I say that it's a rather sort of, you could argue a slightly divisive way of describing the dynamic is that if you go to Brussels particularly if you speak to people who work within the institutions of the EU the Commission, the Parliament and some countries within the EU where this view is more prevalent France or Luxembourg perhaps the primary consideration is how can we keep the EU 27 together as cohesively as possible and in many cases integrate it further have a greater degree of harmonisation and they see Brexit through the prism of a threat to the institutional integrity of the EU they worry about countries that look to Britain perhaps for leadership or look at Britain's example perhaps Denmark or Sweden are countries that are quite influenced by Britain and see things in similar ways to Britain and they think we need to disincentivise those countries from going down Britain's path and even more they look at disruptive political forces within their own countries and worry about giving succour to those disruptive forces so for all of those reasons they say we must not allow Britain to leave the EU and to be seen to have succeeded as a result of leaving the EU and we as a consequence of that need to try and inflict some consequences I'd even go so far to say some economic downsides on Britain to demonstrate to a wider audience the folly of leaving the great European project now there are people on the other end of the scale and they include some countries so for example Poland or Hungary aggressively chafe against European integration are very vocal in arguing against a more integrationist agenda their vision for the European Union is nation states working closely in alliance not an amalgamation of nation states into something approximating a super state made a conscious point of delaying their membership possibly indefinitely of the Eurozone for that reason but it's also a view that is held much more widely in the private sector as you would imagine that it is in the political realm and that argument is that this willful political desire to inflict harm on Britain will be mutually destructive that this will end up being like a divorce where both parties to the divorce are willing to damage their own material interests in order to inflict harm on their former spouse and that that may be understandable emotional response but it's not a rational and logical response to the predicament in which we find ourselves and I say that because I think it's very important particularly with regards to the Irish viewpoint that we try and encourage the conversation as much as possible into the realm of the economic and the pragmatic now you could say well you know this was Britain's problem because Britain voted to leave no one forced Britain to leave and Britain needs to live with the consequences of its decision but there is danger I think in going down that path there's actually danger about what it says about the EU I think to some extent that if coercion becomes the primary tool by which the EU seeks to hold its membership together then quite a lot of people may slightly come to reassess the nature of the club but also I think if an institution puts its own well-being ahead of that of the citizens that it purports to serve then again the institution is going down a difficult path as well and why does this matter from the sort of point of view of the City of London is because and I can't really make this argument without sounding rather sort of self-serving but the City of London is overwhelmingly the dominant financial centre in Europe it is Europe's only global financial centre London's peer group is not Frankfurt or Luxembourg London's peer group is New York and Singapore we are the financial centre for the middle part of the world in global terms and there are advantages to Europe in having a global financial centre on our continent we had a state visit from the President of China a year ago to Britain he spent the first night having dinner as a guest of the Queen at Buckingham Palace so he was interested in interacting if you like with the British state in all its manifestations and they're all prime minister generals and all of the people you would imagine to be invited to an event of that sort and on the second night he was a guest of the Lord Mayor of London in the Guildhall building that Audrey and I work in for a banquet because the Chinese Premier Chinese President rather was interacting with the City of London and if you take a sort of step back from Europe and you look at Europe's what Europe does well if you like one of the ideas ironically behind the European Union beyond a sort of general sense of post-war reconciliation is that these small to medium size nation states in global terms could by aggregating their endeavours and their expertise and their knowledge be more than the sum of their parts and count for something in global terms arguably and this is the irony arguably the best example of that happening in practice in some areas of scientific research and others but arguably the best example is the City of London which is a financial centre of global standing arguably the financial centre in the world in a continent where we have 7% of the world's population at shrinking and we have about a fifth of the world's economy at shrinking we have a growing international hub for finance in London and the reason I say it's an irony of course is that it is hosted by a country that has in effect rejected the integrationist argument and yet the people who make the integrationist argument most strongly are those who are most in favour of trying to disintegrate the City of London as a financial centre and why is that a perilous path to go down this is the way the bit that sounds self-serving but I don't believe it is this big centre exists for a reason it is a it responds to demand there is sometimes I think a slightly deterministic view in Brussels that the City of London exists where it does because a committee of the EU decided it would and that nearly everything that happens across the EU is allocated from the centre but actually London has grown over hundreds of years and evolved into the centre that it is today organically through a whole millions of people and thousands of businesses taking decisions about their commercial interests and if you take a corporation from somewhere in southern Europe for example they are going to London to issue bonds or borrow money because the scale of London and the expertise in London makes it advantageous for them to do so being forced to do that they are doing it because they realise they get the best rates most people are willing to buy their bonds if they are trying to invest the pension savings of their employees they go to London because the expertise and the opportunities and the rates are better than they find elsewhere on the continent if they are trying to exchange currencies they go to London because the pool of money available for that is greater than anywhere else on the continent so trying to diminish and disaggregate our global financial centre isn't just about allocating jobs across Europe it's about a willful act of self-harm being perpetrated by the people and states of Europe upon themselves and I don't doubt that many people would rather that the global financial centre for Europe was in the EU than in Europe not in the EU but it actually most of the time for most businesses doesn't matter very much it just matters that it's on the continent of Europe and I think there is some opportunity depending on the outcome of the negotiations for Dublin to attract some business activity from London but I think by and large Dublin's interests are complementary to those of London not hostile or competitive to those of London I think Dublin benefits from being in close proximity to a global financial centre and if we end up with, for the sake of argument a thousand jobs leaving London just an illustrative number first of all I don't think all thousand will go to somewhere in the EU there isn't like a total sum of financial services jobs in Europe but I think the biggest compensation to be had is where they are located we are competing in a global market some of these businesses will say well we're essentially an American business we'll bring some of those jobs back to America or the growth rates in Europe are so low compared to the growth rates in some Asian economies that we will concentrate more of our firepower and attention on Asian markets or the scale of doing this type of activity it's viable and profitable in London but it doesn't make it viable and profitable if we do it on a smaller scale in lots of different centres so we'll just stop having those jobs all together so I think it's quite possible let's say a thousand jobs, this is all illustrative let's say a thousand jobs leave London 400 of them do not go to the rest of the EU so we're now down to 600 let's say 100 go to Dublin 100 go to Frankfurt, 100 go to Paris 100 go to Madrid, 100 go to Amsterdam and 100 go to Malat the problem you then have is of course that is to the narrow advantage of each of those cities because they have 100 more people paying taxes than they previously did the problem is that you are disaggregating the services not only do you have less money available you don't also have the connectivity that comes from having this activity aggregated in a single centre so the danger you have is that people will spend a lot of their time flying back to London to meet their customers and their advisors because there is a reason why business congregates in one area and it's not determined by government it's determined by the interests of those businesses so where does that leave us all I suppose what it leaves us with is a very difficult political conundrum because it seems to me hard for the British government to deliver the softest form of Brexit consistent with the mandate it has been delivered by the British people seems to me intelligent for the British government to try and deliver the softest form it can of a sort of harder end of Brexit if you like, sort of beyond the sort of EEA Norway option that there is a particular British option that is tailor made to suit the uniqueness of our circumstances but that it is engineered to try and be as economically mutually beneficial as possible and that we as a result of that can ride the Brexit wave with minimal disruption to the economy of Ireland and the economy of the wider EU 27 as well as to that of Britain but it is clearly a fraught process it causes a lot of anxiety in the city of London and it will be the principal subject which will be talked about for many years to come and I look forward to talking about it more with you in the next half hour or so