On August 6 the Mayor of London, Boris Johnson laid down a highly significant marker in his nascent campaign to be the next leader of the UK Conservative party and by extension, the next UK Prime Minister (but one?) writes Tim McNamara, our chief political correspondent.
However, what was more enlightening was his clear message that he is prepared to use the issue of EU membership as a central tool in his forward planning. He has made it crystal clear that he will lead the UK out of the EU if it serves to enhance his chances of leading his party.
Johnson’s speech to a selected audience at the Europe headquarters of US media giant Bloomberg was a carefully calibrated attempt to appeal to the Euro-sceptics in the Tory party over the heads of his leadership rivals in Parliament. His aim was to outflank the current Prime Minister and by extension, his biggest rival, the Finance Minister, George Osborne.
Most of the content of Johnson’s speech about the pros and cons of EU membership can be easily dismissed as ‘guestimates’ based on a report by an economic think tank unversed in the ways of global politics. This was much more about internal Tory politics and leadership campaigns. The report was ostensibly about the economic impact of EU reform or UK exit – Brexit – on London. Like many reports before it, it also overvalues the economic contribution of London to the rest of the UK and significantly undervalues the contribution of the rest of the UK to London.
Where the report is fundamentally flawed is in the presumption that the City of London’s role as a global hub for international finance will remain the same. It is inconceivable that a large number of German or French banks would continue to base sizeable dealing houses and investment arms in London after a Brexit. There would be a concerted effort made to transform Paris or Frankfurt into the go-to place for international finance in the geographical time-frame window between Tokyo/Singapore and New York.
One would also see global players such as Morgan Stanley and Goldman Sachs, amongst others, reappraising the value of London as a financial centre if it was outside of the EU. The highly lucrative Eurobonds market would also disappear from London. Some Tory MPs may fantasise about London becoming a ‘Cayman islands-on Thames’ but it would be a financial cul de sac.
Both Cameron and Osborne (to a lesser extent) are distrusted by Tory Members of Parliament (MPs) over the issue of the EU. Many see Cameron’s reform agenda as nowhere near substantial enough. They believe that Cameron would lead a keep the status quo campaign if a 2017 referendum was to be held.
It is difficult to over-emphasise the extent of Euro-scepticism in the UK Tory party. In many respects most of its MPs and party members are indistinguishable from the Euro MPs and rank-and-file members of the UK Independence party (UKIP).
As each general election takes place the level of Euro-scepticism ratchets up further and further. Tory members overwhelmingly tend to select candidates in their own image (i.e. rentiers and petit bourgeoise garagistes). This self-serving selection process also increasingly involves a display of ideological fervour. This is predicated on the three unifying tenets of the current day Tory party. Firstly, an unbending belief in the reforming power of the market above all else. Secondly by extension, interventions by the State are nearly always a barrier to free market innovation and progress. Finally, that the European Union is a corporate superstate that is a socialist-leaning behemoth whose main purpose is to put regulatory barriers in the way of legitimate capitalist activity.
If there is one certainty about the condition of centre-right politics in the UK after the next general election in 2015, it is that the Tory parliamentary party will be more right-wing and definitely more Euro-sceptic than the current one. This is the fertile ground that Boris Johnson hopes to exploit post-May 2015.
Johnson’s Bloomberg speech was a masterpiece in political positioning. He has clearly demonstrated that he is the only leadership candidate prepared to deliver a Brexit if necessary. He is quite prepared to mount a leadership challenge after the next general election and he is ready to utilise the issue of EU membership as a mere stepping stone towards his ultimate political ambition.
Tim McNamara is head of the Peercourt consultancy firm. He was previously political editor at the European Commission.