Whose Interest?

Cameron claimed he was acting in the national interest when he vetoed our involvement in the EU Treaty early on Friday morning. Much is still to emerge from the spinning and counter-spinning. One fact is clear. The deeply unattractive europhobic wing of his party are happy. That to any rational being must be a cause for concern. Dinner with 30 of his backbenchers last night reinforces the impression that the veto was done on their behalf. Cameron cited protecting the City as a major reason for his objection.

As Nicholas Faith, writing in today’s Independent makes clear, the City is not a friendly or effective bedmate.

“Let us hope that the City – and above all the hedge funds which contributed so generously to the Tory war chest – are happy.

For in the early hours of yesterday, David Cameron made it clear that the well-being of London's financial community was a vital element in Britain's economic well-being. So crucial, in fact, that it formed the key reason – or was it just a convenient excuse? – for the decision to ruin our relationship with the European Union, and above all with its dominant forces, France and Germany.

Cameron's veto of the EU treaty change needed to save the euro could prove an exceedingly expensive gamble, politically and economically for him – and indeed for the whole country. It also turns the spotlight on what the City can do in return for the Prime Minister's loyalty. In theory, it should lead the City to help the rest of a country that has taken such a risk on its behalf. But this would set a historic precedent in 2,000 years which, unfortunately, show that London has always been a selfish, insular place invariably independent from the rest of the country, looking abroad for its living, and perfectly capable of ignoring the wishes of successive governments up-river in distant Whitehall, let alone the needs of the wider economy by providing funds for industrial development.

The City's neglect is based on a fundamental inability to think long term, for the Square Mile has always been a home for traders rather than investors.

....For centuries, the greed and short-sightedness of the City's denizens have made them a target: in the 18th century, Jonathan Swift described the jobbers as "traders waiting for shipwrecks in order to strip the dead". Alexander Pope was just as sharp: "There's London's voice, 'get money, get money'." The industrial revolution emphasised that the rest of the country lacked any real business connection with London. In the 19th century, great manufacturing cities – Birmingham, Manchester, Middlesbrough – boomed thanks to local finance. The biggest absorbers of capital, the railways, were originally financed by Quakers in the north east and by what was called the "Liverpool interest". As soon as the City got involved, there was the usual pattern of recurrent financial crises. For most of London's company promoters were crooked. During the 19th century, the London markets became steadily less connected with commercial reality. As the great Nathan Meyer Rothschild put it: "I am no trader in goods." By the end of century, the City was investing money everywhere from US railroads to the railway networks of Argentina, often with disastrous results, rather than at home.” 

Judging by recent events, nothing has changed. Greedy chancers who are little better than the gamblers found at a racetrack brought the world to its knees. It is these self-same chancers that Cameron is in hock to. 

This ConDem coalition has talked a lot about putting curbs on excessive bonuses and salaries. 

It has done bugger-all.

National interest?