Will Brexit be advantageous to offshore finance? The answer could well be yes. The European Union is pro-regulation of offshore finance for obvious reasons. The EU is much less of a deregulated economy than a post-Brexit United Kingdom is likely to become.
UK Prime Minister Boris Johnson has asserted that he wants the UK to become a champion of global free trade and economic deregulation. In that quest, Mr. Johnson’s UK and Donald Trump’s United States are on the same page. The US today is booming economically, and the country has become a paradise for the super-wealthy. Wealth inequality has increased dramatically in Mr. Trump’s US. However, working Americans appear satisfied with the economy, and there is a belief the country is doing “great.”
A post-Brexit UK will shift to the right in terms of her economy. There is talk of a return to the Margaret Thatcher era, with its stress on free trade and a business-first culture that favours the entrepreneur and businessperson.
The City of London will use offshore finance destinations to buttress its profitability as it hits a buffer in an EU that is intent on replacing the City’s pre-eminence with European cities such as Frankfurt, Berlin and Paris. Already, a number of UK financial institutions have moved to European cities to protect themselves from the adverse effects of Brexit.
The Boris Johnson economy appears to be an economy that will encourage the wealthy to further increase their wealth.
Jeremy Corbyn and his Labour Party, on the other hand, was not friendly to the wealthy and certainly did nothing to encourage offshore finance. A Jeremy Corbyn government would have created major roadblocks for offshore finance. Mr. Corbyn wanted to tax the wealthy and rein in offshore finance in order to finance a socialist-type economy that would have benefitted the UK masses through massive social investment. This was anathema to the one percent, and the UK press is owned by the one percent.
The UK has always possessed a strong centre-right political culture. And apart from the dislike of Mr. Corbyn as a leader, UK voters further possess a shop-keeping culture. Conservative UK is a country that possesses a business-friendly culture and is in love with small government. The less interference on the high street by government, the better. And that is in spite of a strong socialist tradition, especially in the northern part of the country.
In the December election, Mr. Johnson made major inroads into the Left’s natural constituencies, especially in the northern Labour strongholds. It will take at least five years for the UK Left to rebuild after the devastating loss.
Instead, Mr. Johnson states that it is his dream to transform the UK into a land of prosperity through deregulation, support for business, and free trade both nationally and internationally.
Some have stated that it is the prime minister’s dream to turn the UK into the world’s largest offshore financial centre in the mould of Singapore. He also aims to leverage his friendship with Mr. Trump to aggressively open up global markets through a northern Atlantic political and economic alliance: a new special relationship.
The preceding will be excellent for offshore finance centres, especially if Mr. Trump wins the November 2020 presidential election in the US.
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