Much is being made of HSBC’s statement that the UK-based bank is considering moving their headquarters away from London, with senior Labour politicians quick to take this corporate bellyaching as vindication of their plan to deny the British people any say in their democratic future.
From the report in the Guardian:
HSBC, Britain’s biggest bank, has issued a stark warning about the economic risks of the UK pulling out of the European Union as it revealed it was considering moving its headquarters out of London.
The surprise announcement of a full-blown review into where the bank should base its operations will stun politicians on the general election campaign trail.
HSBC listed the economic uncertainty created by the risk of the UK going alone – a blow to the Conservatives which have pledged to hold an “in-out” referendum on the EU.
Its shares jumped almost 4% after the statement, which was released before the bank’s annual shareholder meeting in London. The rise added more than £4bn to the value of HSBC – already one of the most valuable companies on the London stock market.
Among the Labour politicians to jump on the announcement was the shadow Business Secretary, Chuka Umunna, who wasted no time in fashioning HSBC’s announcement into a weapon with which to bash the Tories.
In a series of tweets, Umunna claimed that it is “irresponsible” for the British people to have a debate about whether we wish to become a sovereign country again, and that it would be a “disaster” for the economy if Brexit (British secession from the EU) were to happen:
Isn’t it funny how the voice of big business – usually the object of scorn and hatred from the left – suddenly becomes wise and sagacious when the short term interests of the large corporations happen to coincide with those of the Labour Party?
Labour have been hammering “the corporations” relentlessly since losing power in 2010, accusing them of immoral (if not illegal) behaviour for such transgressions such as not paying enough tax, not paying employees enough money, paying employees too much money and a host of other sins. In Labour’s eyes, the words of a bank executive were valued beneath junk bond status – until now, when suddenly they have become far-sighted and wise AAA-rated pronouncements, just because they have come out in support of Britain remaining in the EU.
But of course HSBC would rather the UK stayed in the European Union. HSBC is a giant bank, by and large very good at what it does, and one of they key preoccupations of any bank is to minimise risk. And while the long-term benefits of Britain freeing itself from the suffocating embrace of the European Union almost certainly outweigh any initial financial hit in terms of divestment or relocation out of the UK, banks (and the executives who run them) are not rewarded based on long-term decision making. At best, their time horizon will stretch ahead to the outer limits of the decade, the period in which their performance will be judged and their remuneration (bonuses, etc.) decided.
The people who run HSBC want to maximise shareholder value in the short term, and this means minimising exposure to short term risk or instability as far as possible. The upheaval of Britain leaving a parasitic, undemocratic super-national organisation whose succubus-like tentacles reach into every aspect of our daily lives will naturally cause some shockwaves, and potentially some short term pain in very specific areas. But going to the hospital to have your inflamed appendix removed is also an unpleasant experience, and yet much like Brexit, the end result is the quick surgical removal of a totally useless organ, and a vastly improved quality of life once the scars heal.
Labour may have found a new best friend in scandal-plagued HSBC, but despite what Chuka Umunna wishes us to believe, this does not mean that Labour are suddenly the Party of Business. A recent article in Spiked Magazine pointed out the many ways in which Labour has become a “corporate, middle-class party”, and this is absolutely true – on some specific issues, Labour may claim to be the party of business, but it will only ever be the party of big business and special interests.
Ask any sole trader or the boss of any small to medium sized firm in Britain what they think about the European Union, and you won’t hear gushing praise about how benevolent Brussels is, or how traumatic it would be for the UK to leave. You are far more likely to hear frustration, complaints and deep weariness, expressed by people who are worn down trying to comply with excessive EU regulations governing every aspect of what they do.
Britain’s small businesses are the engine powering our economy, while the growth in the number of self-employed people starting their own businesses has been one of the key drivers of the current economic recovery. These people do not get to sit in conference rooms in Brussels and hammer out the terms of the TTIP trade deal being thrashed out between the United States and the European Union. It will not be for their interests or their benefit that future regulations or trade deals will be signed. It’s all very well holding up the example of HSBC as an example of pro-European British industry, but it is only companies the size and scale of HSBC that can navigate the labyrinthine regulation structures and corridors of power to make Britain’s EU membership work in their favour.
Finally, it must be remembered that business isn’t everything. Yes, the health of the economy is vitally important, the key to our current and future prosperity, but it is not the sole consideration. Things like democracy matter, too. The constitution and structure and government of our country matter enormously. Even if all of HSBC’s complaints were more than the risk-averse grumbling of pampered executives and there was a real, definite economic cost to Britain leaving the EU, at what point does the loss of the ability to determine our own future and govern our own country exceed any possible short-term financial cost of Brexit?
This blog would argue that this point was passed long ago. Too many of our laws and regulations are made in Brussels by the European Union, a super-national organisation whose stated aim is “ever closer” political union between member states, and whose opaque and undemocratic institutions (voting for regional MEPs in a European “parliament” does not equal democracy) make many banana republics look like paragons of good governance.
The ability of the British people to determine their own future does not appear as a line item on HSBC’s balance sheet or P&L account, so of course HSBC doesn’t care whether the people in its home country live in a functional democracy – the words behind the initials HSBC themselves hint that the bank is just as happy to make money from operating in oppressive autocracies as it is in free democratic countries. And why should HSBC care? It is not the job of corporations to safeguard the constitutional frameworks that hold our country together.
That job falls to our politicians, people who should be able to distinguish corporate self interest from the national interest. But in their race to capitalise on HSBC’s EU scaremongering, the Labour Party has shown it is willing to advance HSBC’s corporate interest along with their own narrow party interest, at the expense of the British national interest.
And for perpetrating this conspiracy against the British people, Ed Miliband and HSBC are welcome to each other.