Regulation Matters – August 2017

Brexit negotiations, succession plotting and pay gaps – is it all just a little bit of history repeating?

This month we’re planning ahead to March 2019, looking back to 1979 and really, really minding the (pay) gap.

If you’d like to know more, you can catch up with our previous editions, or sign up to receive regular updates, call us on 020 7842 4800, contact us – or send in your comments using the form below.

Got any plans for 20th March 2019?

In what seems increasingly inevitable, Liam Fox, the UK’s International Trade Secretary has acknowledged that it will be hard for Britain to negotiate a new trading relationship with the EU before it leaves on 20 March 2019 – Exit/ E-day. He argues that such a view would be optimistic, given the very recent history of free-trade agreements.

Come E-day, when the UK’s European Communities Act of 1972 is repealed, if neither a trade deal nor transitional arrangements are in place, there could be insurmountable consequences for both the UK and the EU.

Given this ambiguity, Deutsche Bank CEO John Cryan’s official plans – dubbed ‘Project Bowline’ –  involve informing clients that their trading contracts will be switched/ ‘repapered’ to Frankfurt, to go live in September 2018. The bank also intends to move €300bn of assets from its UK entity over to Frankfurt by March 2019.

Just a little bit of history repeating …

Le rabais britannique was the outcome of a four year battle by former PM, the late Baroness Thatcher to reduce Britain’s contribution to the European Union in the early 80s:“I want my money back”.

And so, she did, in the form of an annual rebate. Even from the beginning there was irreparable damage to the UK’s relationship with the EU and to this day it’s irksome, particularly for the French.

My own Brussels EU lobbying and government affairs experience over the past dozen years supports the sentiment of former PM David Cameron, who said in 2013 that “when you negotiate in Brussels, it is still her rebate you’re defending.”

It explains a lot about the current UK/EU relationship.

Although he was barely ten years old when Thatcher addressed the 1979 EU Summit in Dublin, some 40 years later French Finance Minister Bruno Le Maire still said “as Thatcher famously said, we want our money back” insisting that Britain will have to pay a divorce settlement, which he puts at €100 billion.

Truly it seems, “those that do not remember the past are commended to repeat it” .

Could the inconceivable happen (again)?

Former Deputy PM Lord Heseltine thinks it is not conceivable” that the current PM will “lead us into the next election”.

According to Lord Heseltine, the challenge for Theresa May is not her inconceivable premiership, but rather how does she secure the best successor able to be the leader for the party?

This will all may need time, for two reasons:

  1. Who – as there is no obvious choice (for leader)?
  2. What – even more importantly, what are they going to say (and do)?

The noble Lord predicts a general election in the next 12 -18 months. My money is on 6 -12 months.

In terms of contenders, of course there is always Blistering Barnacles Boris – but that ship has probably long-since sailed.

So ‘happy holidays': David Davis may well appear in your Christmas stocking. Conservative party grass-root members have called for Theresa May to quit by the festive season.

And then there is MP Jacob Rees-Mogg, with bookies placing him as second favourite behind Davis for PM. He recently said of the Brexit divorce bill that the EU has:

“no legal basis for demanding these payments. They’re saying a moral obligation, but a moral obligation ranks less than a legal obligation.”

Whether any of them could be the UK’s next PM, right now, to paraphrase Oscar Wilde, it looks more like the inconceivable in search of the indecipherable. And if politics has taught us anything of late, it’s that the unprecedented just keeps on happening.

Mind the gap?

With the BBC still embroiled in the issue, more and more column inches are being dedicated to the gender/ BAME pay gap debate.

This is not new news – although some might say it is, until the gaps are bridged. For others, the blatant and astronomical size of the gaps between individuals performing exactly same role show that the problem is not being addressed and suggest that for some, it’s not actually seen as a problem – and that is definitely newsworthy.

Following the BBC pay row, a strongly worded letter was sent to the British broadcaster’s Director General Tony Hall to ‘correct this disparity’. His arguably condescending response stated that the BBC gender pay gap cannot be tackled ‘overnight’.

So can the financial sector can do better?

Former UK Minister for Women and Equalities, Nicky Morgan has been elected as the first female leader of the influential Treasury Select Committee, succeeding the Rt. Hon Andrew Tyrie

The Treasury Committee, appointed by the House of Commons, examines expenditure, administration and policy of HM Treasury, HMRC and associated public bodies, including the Bank of England and the Financial Conduct Authority. Inquiries have included UK-EU post Brexit relationship/ RBS bailout.

It could be within Morgan’s reach to launch an inquiry, calling on the financial sector to explain the gender pay gap and detailing exactly how it’s going to be tackled. Well maybe not ‘overnight’. But 38 years after the UK had its first female leader, we need to call time on this issue.

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