A wing and a prayer: Bank of England goes to Farnborough
London Briefing: Glitches foil live feed grilling as Brexit chaos clouds aviation sector
Bank of England governor Mark Carney at the Hampshire town of Farnborough: “In the event of a no-deal scenario . . . we might have a lot of idle bankers.”
It seemed like a good idea at the time – instead of grilling Mark Carney and his Bank of England colleagues in the usual confines of a stuffy Westminster committee room, why not enjoy an awayday in Farnborough?
After all, the Hampshire town, some 40 miles southwest of London, was hosting its biennial international airshow, showcasing Britain’s expertise in the aerospace industry and would be packed with high-flying executives from both home and abroad.
MPs on the treasury committee, who were quizzing the governor on the bank’s financial stability report, were also keen to meet with business leaders at the event to hear their views on Brexit.
Alas, the technology failed to match the high-tech surroundings. There was no video and the audio-only feed kept cutting out – ironically, just as the discussion turned to the “technological resilience” of the banking and payments system in the face of IT glitches – before failing altogether.
The session went ahead, but without the live feed that usually accompanies these events, which are closely watched in the City and on the foreign exchanges, particularly when the governor appears.
The news agencies – and Twitter – ensured Carney’s comments were swiftly relayed back to the markets in London but the treasury committee may well decide that its first hearing to be held outside Westminster will also be its last.
Carney’s message, a full recording of which was released later in the day, was a familiar one. But it was given added urgency amid the deepening political chaos engulfing Britain’s exit from the European Union following prime minister Theresa May’s acceptance on Monday of amendments from hardline Brexiteers to her Chequers compromise plan.
It was too soon to make a judgment on the government’s Brexit proposals, Carney said, a sensible stance for the governor to adopt for now, as those proposals appear to be changing by the day. “Our job is to make sure we are as prepared as possible,” he said.
Stating the obvious, the governor told the committee that a no-deal Brexit “would be a material event”. Ever cautious, and no doubt mindful of the criticism he has received in the past for previous Brexit-related warnings, the governor added: “I wouldn’t prejudge in which direction though.”
He added: “Speaking very narrowly about the financial services side, in the event of a no-deal scenario . . . there would be big economic consequences. We might have a lot of idle bankers as there is not a lot of demand for their services.”
Idle bankers may well be the least of Britain’s worries in the event of a no-deal Brexit, and Carney stressed that the banking sector is strong enough to withstand a disorderly exit. He repeated his view that the UK would not suffer alone: “It’s cold comfort, but it will be worse in Europe than it is here.”
Talk of Brexit is everywhere at Farnborough this week, although there had been an upbeat mood on Monday as the government announced plans for a £20 billion (€22.5 billion) investment in a new-generation fighter jet, Tempest.
Opening the airshow, the prime minister insisted her Brexit plan would strengthen manufacturing and safeguard jobs. Her defence secretary, Gavin Williamson, underlined the importance of the combat air industry to the UK, where it employs 18,000 directly and supports a further 100,000 jobs in the supply chain.
Unveiling a concept model of the Tempest fighter, which will be armed with laser weapons and can fly without a pilot, Williamson said the sixth-generation combat craft, which will ultimately replace the Typhoon Eurofighter, should be flying by 2035. It will be built by a consortium headed by BAE Systems and including Rolls-Royce and the Italian defence company Leonardo.
Williamson said the UK has been a world leader in the combat air sector for a century, and was determined to make sure it stays that way. He stressed the importance of international collaboration on the project, promising to put the industry’s world-class skills “at the disposal of our friends”.
On Tuesday, though, there was widespread dismay among industry leaders attending the show at the latest political wranglings over Brexit – and the threat of worse to come.
“We can’t rely on anything,” complained Rolls-Royce chief executive Warren East, who said his company would continue to make contingency plans to prepare for a hard Brexit.
While the proposed legislation was incrementally positive, it still leaves “loads of unknowns” – and half of it has just been undone. “Look what happened yesterday,” he said. “It got incrementally worse again.”
Fiona Walsh is business editor of theguardian.com