"London is the financial capital of the world because of our timezone (we're slap bang in the middle), our friendly laws AND free access to the EU markets. If we removed that we'd see banks all wanting to establish a new European HQ so they can continue to trade in Euros.
Please come and explain this to me - I don't get why the banks would want to move - we use sterling here anyway?"
ivykaty44: International banks are in London because:
- Under EU financial services rules a bank in London can lend to a business borrower anywhere in the EU or an investment manager in London can have as clients companies anywhere in the EU. This is under EU rules on freedom to provide services. If the U.K. leaves the EU then those rules will no longer apply. International banks are going to establish their European HQs in the EU instead - I expect some will go to Paris, some to Dublin, some maybe somewhere else.
- The EU rules on free movement of workers mean that they can easily employ in London people from any EU country. Most non-admin staff in international banks in London are not from the U.K. Unfortunately, because of the poor education system / general laziness, non enough British people can speak French/German/Italian etc. with sufficient fluency and not enough of them have the educational standards to do the complex work, never mind work the long hours involved.
"Can I also ask why as a country we wouldn't want to trade with other countries outside the EU, if already we have 90% of our trade outside the EU surely finding another 10% of trade to go outside wouldn't be so hard with countries such as china and India?"
ivykaty44: 90% of the U.K.'s trade is not outside the EU. That figure is generated by the anti-EU bunch saying 80% of U.K. trade is internal, e.g. you buy a piece of beef that is the product of a bullock raised and butchered in the U.K. But foreign trade is vital.
Roughly half of the U.K.'s exports go to other EU countries. A bit more of the U.K.'s imports come from other EU countries. China and India are much less important - in 2011 the U.K. exported more to Belgium alone than it did to China and India put together. The anti-EU bunch will say the U.K. imports more from the rest of the EU than it exports, so it is better off without that trade. That is utter rubbish. First, the U.K.'s total imports are, and have been for many years, more than its exports - it's not just with the EU that the U.K. runs a trade deficit. For example, in 2011 for ever £1 of goods the U.K. exported to China the U.K. imported £3 of goods from China. For many many goods geographical proximity matters as shipping costs are too high.
Here is a link to the 2011 figures for U.K. exports and imports with different countries:
www.guardian.co.uk/news/datablog/2010/feb/24/uk-trade-exports-imports