European Union – In or Out?

The reasons for out seem to be: EU regulation that is harmful to the UK’s interests; migration; and the UK’s contribution the EU budget. The principal reason for staying seems to be access to EU markets.

Regulation that is potentially harmful to British interests can be handled effectively. For example: in the 1990s I was seconded (1 to 2 days per week) as the sole technical advisor to the European Commission on financial services. By explaining the nature of financial services in the UK, when proposals came up from the Commission, I was able to ensure that no regulation inimical to British interests emerged in the first Investment Services Directive.

Regrettably that technical engagement was not there for subsequent financial services directives / regulation from the EU and much unsuitable (for the UK) regulation has emerged. This is avoidable. All HM Government (in particular HM Treasury) has to do is to provide technical experts to the Commission who will be effective. The language in most of the committees is English which makes it easier for Brits to influence the regulation for the wider benefit in general and in particular the benefit of the UK.

Potential EU Migration is thought to be an issue. But migration from countries outside the EU seems to have been forgotten. As a migrant myself (from 1922 members of my family have spent time in the UK – most returned to Ceylon though) I have bought into British values. All migrants should be encouraged to do this. Perhaps then migration will not be seen to be such an issue.

The EU budget can be seen on the one hand as a cost, but on the other as providing an opportunity. First for trade but also for the UK to benefit from the various grants and incentives available. To take full benefit, the UK needs to study the regulation and assist British enterprise and the wider community to benefit from these grants.

About half the world is English speaking. Also Britain has historical trading and wider links with many countries. The UK can be the bridge between the EU and the English speaking world and more widely. Trading with EU countries on the one hand and the rest of the world with the other could be of benefit to the UK.

Moreover, the UK is the world’s pre-eminent centre for financial services. Located between the Far-Eastern and American time-zones it is possible to trade with the Far-East in the morning and the US in the afternoon acting as a bridge between these time-zones and also the EU.

All significant participants in the financial markets have a presence in the UK. Historically this developed from London as a port where commodities were traded as they were unloaded from / reloaded onto ships. Financing of business and trading of futures grew also from the position of London as a port and the links with the empire and more widely.

The market participants in London and UK financial infrastructure are valuable national assets. I note here as an aside, ownership of the infrastructure, which are national assets, should remain in British hands. But if the UK left the EU the market participants could leave for other centres. It would be very difficult to bring them back once they are established elsewhere.

I believe the UK has much to gain by remaining in the EU.  

Migrating to the UK

Migrating to the United Kingdom

Ranil Perera

There has been much debate recently about migration. Some of it in connection with the vote on EU membership. As a migrant I thought it might be helpful if I contributed to the discussion.

As migrants my wife and I have bought in to British Values. We judge that we have integrated into the local community also. Given our colonial origins – Ceylon – now known as Sri Lanka it wasn’t difficult. She and I communicated with our parents, grandparents, relations and friends, principally in English. We were both educated entirely in Sinhalese but understood English culture from parents.

When I arrived in the UK to attend university and quoted English dramatists, poets and authors, e.g.

·        (when bored) from Shakespeare - Macbeth’s soliloquy–

‘Tomorrow and Tomorrow and Tomorrow,

Creeps in this petty pace from day-to-day

To the last syllabus of recorded time’

·        (when impatient) Andrew Marvell[1]-

‘Had we but world enough and time

This coyness lady, were no crime’

I was surprised to find that I had a better grasp of English literature than some my British born, English fellow students. I note here I studied science at ‘A’ level and then engineering. I acquired the grasp of English literature and British values from my parents their friends and my classmates.

I heard on BBC Radio’s ‘Today’ programme (19^th June 2016) someone advocating that migrants ‘interact’ with their local communities but remain as separate communities: I wonder whether the emphasis should be more on integrating rather interacting? Perhaps we migrants should see ourselves as citizens of the UK first and then as members of the local community rather than members of a separate migrant community? If migrants keep themselves separate, all will be the poorer for it – and this approach may foster inter-communal tensions and strife even. As migrants we should be committed to the country we are in, and perhaps more widely to Europe, and even more widely the world community – but first to the country we live in and have allegiance to.

The first member of my family to migrate was my maternal grandfather, Thomas David Jayasuriya MBE, OBE. He came to the UK in 1922 to study at the University of London and returned to Ceylon when he had completed his studies.  

My father came to the UK with his mother in the later 1940s and studied law at Chart’s Chambers, Lincolns Inn. Jeremy Thorpe, the Liberal politician was a fellow pupil. My mother who had graduated from the University of Ceylon and was private secretary to the Minister of education (Mr Eddie Nugawela), gave up her job, migrated to the UK and married my father at St Barnabas Church, Kensington, in January 1950.

I was born however in Ceylon. But later lived in the UK between the ages of two and four years. Then we all migrated back to Ceylon. But my father returned to the UK and worked for J H Vavasseur and Co in the City[2] before returning to Ceylon at the end of the 1950s.

My paternal grandfather T D Perera CMG retired to a flat he had bought in Hammersmith. But after many years, returned to his wife in Ceylon.

My wife Romie’s forbears are more interesting than mine. Some of her father’s ancestors were migrants from Cornwall to Ceylon. Other members of her father’s people had Dutch origins – and perhaps may have been part of the Jewish exodus from Europe. Her maternal great-grandmother Amy was presented at Court in 1897 – but on the way to London, during her European travels, married Eduardo Roversi in Rome in 1894. My wife’s grandmother Elena, great-aunt Hilda and great-uncle Neville were all born in Rome but educated in England. In 1922 (perhaps because of the rise of Mussolini) Amy returned to Ceylon with her three children who were now aged around 20.

I came to University (Downing College, Cambridge) in the 1970s. My mother migrated to Cambridge at the same time – parents were not getting on. She became a civil servant. I did do some rowing at Cambridge, representing my college at the Henley Royal Regatta.

Having worked in banking and financial services (asset management, insurance and for financial infrastructure) as a consultant or employee, I found myself seconded (1 to 2 days per week) as the sole technical advisor to the European Commission (in the early 1990s) on financial services. By explaining the nature of financial services in the UK and the rest to the EU, I was able to ensure that no regulation inimical to British interests emerged in the first Investment Services Directive. Regrettably that technical engagement was not there for subsequent financial services directives / regulation from the EU, and, consequently, much unsuitable (for the UK) regulation has emerged.

I believe that proper technical engagement with the European Commission can ensure that EU regulation inimical to the UK can be avoided. Even post-Brexit.

My wife and I were married at St Margaret Lothbury, in the City of London. The vicar, Tom Farrell, had been a hurdler. Duncan White[3] a Ceylonese hurdler, known to my father and father-in-law was known to Tom, as Duncan had trained with the British team. I had met Duncan when I was a boy, at the Ceylon University sports grounds.

As mentioned at the start, my wife and I have both bought in to British values and seek to contribute either through voluntary work (my wife teaches English to migrants, I have worked voluntarily on projects / articles to promote the UK as the world’s leading financial centre) or in other ways to the benefit of society as a whole. We do not seek to impose other values on British society but are ready to share our experience where we judge that it would be helpful.

I believe that migrants to the UK should be encouraged to buy-in to British values. Also integrate into and contribute to British society. After all, as migrants we have a choice. If we choose to stay in the UK we should buy-in to British values. Also contribute to British society as a whole. This could be done by making suitable voluntary activities / service available to migrants.

Noting that English is spoken by about half the world, I believe that the UK could still play a leading role in Europe on the one hand and the world community on the other. Perhaps acting as a bridge between the EU and the English speaking world.

The UK is the world’s leading centre for financial services. It must continue as such.

Whilst manufacturing in the UK can and should revive (there was a time when Austin and Rover were considered high quality cars and ‘continental cars’ mass produced) perhaps current emphasis should be on the high technology industries? 

Britain’s position in the world community must be pre-eminent. Migrants can contribute to this.

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[1] ‘To his Coy Mistress’

[2] I had the privilege of meeting the son (Dr David Hay) of my father’s boss (Andrew Mackenzie – Hay) at the City University Club in the early 1990s.

[3] Silver medallist in the 1948 Olympics.

FT article 30 Dec 2015 noting end of 'Banker Bashing’

Perhaps a question that should have been addressed is should 'banker bashing' have started at all? The UK arrangements for regulating financial services,as it happens put in place by the Labour Party, seemed to be excellent: combining prudential, conduct of business and anti-financial-crime regulation in a single regulatory authority. Also there was monitoring of banks and building societies (deposit taking institutions) via the FSA Financial Risk Analysis and Monitoring unit – FRAM, to identify individual institutions at risk, groups of institutions that could be vulnerable and threats to the system as a whole. 

The US system of bank regulation, on the other hand, was flawed. Its 'on-balance-sheet' leverage ratio focus encouraged securitisation. The rating agencies, perhaps relying on models whose parameters were based on benign financial conditions, gave the securities containing the securitised loans a rating that did not hold up in times of financial stress. This exacerbated the potential for problems.

There was a failure of execution rather than design in the UK. The balance sheet return the BSD3 (launched by the FSA in 1999) would have shown that RBS (whose accounts showed a reduction in bad debts of around £1 billion in 2002) and HBoS were both potentially short of capital. In 2002/3 these two should have been asked to freeze their balance sheets until they shored up their capital.  Equally returns from Northern Rock and others would have shown a reliance on wholesale funding although having more than enough capital. The lender of last resort, the Bank of England, should have provided liquidity to these. Whilst it did not provide liquidity for Northern Rock, it must have done so for the others.

London, located between the Far-Eastern and American time zones is geographically in the right place to be the world’s leading financial centre. Financial services grew out of its role as a port: first the commodities that were unloaded were traded (initially in coffee houses); then financing and related services evolved. The evolution of London as the world’s leading financial centre resulted in a trained workforce for financial services and until recently a regulatory framework that balanced risk management and consumer protection on the one hand with fostering financial innovation and financial business on the other. 

The changes to the regulatory arrangements following the crisis which include increasing capital and liquidity requirements for banks, are addressing a failure of execution via a redesign of the system. If the regulators focus on identifying assessing, monitoring and managing risk, the redesign of the system in the UK to the extent it has been done, would be unnecessary. This redesign probably is being viewed with glee by other financial centres - who want to business to migrate from London to their own centres.

Potential consequences of the increased capital and liquidity requirements could be on the one hand a reduction in available finance to foster Britain’s prosperity and an encouragement of shadow banking’ i.e. non-bank lending, with possible threats to financial stability, on the other.

Many with the interests of the UK at heart, are hoping that HM Government and in particular HM Treasury and the Bank of England would restore a regulatory framework that balances stability and consumer protection on the one hand with the continued success of the UK as the world’s leading financial centre on the other.