The Failed Prophets of Project Fear


The financial sector once again confounds pessimistic predictions.

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Many readers will remember the prophecies of doom for Britain’s financial sector.  Although we’ve reported on the non-appearance of this ruin before, a recent report on financial firms’ investment and labour plans bears this out further.  Strangely, this significant piece of financial news hasn’t featured in the Financial Times’ Brexit section (nor indeed in the Guardian’s), although the FT’s sister paper has noted it.

The good news that the Times noticed is that 71% of Europe’s most highly-paid bankers still live in the UK – highlighting the continued dominance of London’s financial sector, and representing a large pool of taxpayers and spenders (PAYE receipts from the sector represent close to £20bn in tax revenues).

Perhaps the more significant, however, is an overlooked report by Ernst & Young.  In a survey of business confidence taken among senior finance sector figures in April 2021, the firm found that 41% planned to expand their operations in the UK.  A mere 6%, by contrast, intended to reduce them.  As was pointed out on Twitter this is something of an embarrassment for E&Y – the firm had warned of perhaps as many as 232,000 job losses as a result of Brexit.

What these numbers highlight is that Project Fear was always primarily a political rather than an economic endeavour.  When industry representatives and civil servants warned of catastrophic change their objective was usually to protect their short-term economic interests, preserve personal networks or vindicate a sense of belonging to a trans-national, cosmopolitan class.  It also suggests the politicisation of ‘expertise’, which was deployed throughout the referendum process to try and prevent an honest public reckoning of the benefits and harms of Brexit.

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Briefings For Britain