‘Business MUST speak up’: Former Lloyd’s boss issues provocative Brexit warning

Change: John Nelson believes a new political party could emerge

John Nelson, ex-chairman of the world-famous Lloyd’s of London insurance market, doesn’t want to say there will be ‘civil unrest’ in the event of a disorderly exit from the European Union, but it is clear that he thinks it.

‘If the supermarket shelves don’t have what you want, if you can’t get the medicines you want, what are people going to think?’ he asks.

‘I don’t think there’s been any planning for logistics whatsoever – of any consequence. You’re not going to get it in place in time.

‘There is a serious threat for the actual physical movement of goods, for manufacturing, food, pharmaceuticals, and this could lead to a very, very serious situation indeed.’

Change: John Nelson believes a new political party could emerge

Change: John Nelson believes a new political party could emerge

For a City grandee of Nelson’s stature, cautious by nature and careful never to overstate a case, these are strong words. With his wide experience of business – he chaired property group Hammerson, was deputy chairman of retail giant Kingfisher and served on the board of BT following a glittering career in investment banking – he knows what he is talking about.

He has come out of semi-retirement to press his case on Brexit, and our interview is interrupting his birthday – he turned 71 on Thursday. He wrote a letter to the Financial Times last week urging fellow business people to speak more openly about Brexit and the damage he feels it will do to Britain’s economy. 

He says: ‘I know many, many people are very concerned, particularly business people, but also politician friends of mine, and for some reason they seem to be holding their counsel. I think it’s a great shame.

‘They should be speaking up, because I think the population do not understand the consequences of what we’re heading for at all.’

Comments like that are likely to enrage those who voted for Brexit, who will say Nelson is a typical elitist Remainer patronising the British public.

Many people are concerned… but they are holding their counsel. It’s a great shame 

But his letter struck a chord and was shared widely on social media. Nelson has, he says, been inundated with messages of support. ‘My email inbox and phone have been overheating. I haven’t been able to get to all the messages, there are hundreds and hundreds of them.’

He is braced for a backlash, saying: ‘No doubt I will get some criticism for saying what I have. I haven’t yet seen anything critical but I’m sure there is on social media, I don’t tend to follow it.’

If there is one thing that is certain in Britain’s febrile political climate, it is that Nelson is making himself a target for angry Brexiteers.

He wants a second referendum and feels that a new ‘centrist’ party could emerge, perhaps similar to Emmanuel Macron’s En Marche in France. He says: ‘There’s a very large body of MPs, probably a majority, who actually do understand what’s going on. Across the board, I think you’d find there’s a majority who would have a lot of sympathy or share my views.

Iconic: Lloyds Building in the City of London

Iconic: Lloyds Building in the City of London

Iconic: Lloyds Building in the City of London

‘In the end what will happen is maybe something like in France where a new political party is formed, of the centre, because I don’t see how this can go on. We’ve got extreme tails wagging the dog.’

He wants a second referendum ‘because the route we are going down bears very little resemblance to what the population was told during the first referendum’. Again, Brexiteers will say that is condescending, and everyone knew what they were voting for.

The trade implications of Brexit are one of his biggest worries. He says: ‘Forty-four per cent of our trade is with the European Union. You look at the way in which the UK has grown its service sector – not just financial services – and a large part has been helped by having freedom to trade within the EU, passporting rights.

‘That is extraordinarily potent and strong. People who say it doesn’t matter, we can do without that and negotiate our own free trade agreements – it’s fanciful, absolutely fanciful, the idea that we can do that.’

The Government has made no progress – ‘not a jot’ – in reaching new trade agreements over the past two years, he says, adding: ‘And I wouldn’t expect them to. It takes years and years to do this.’

He likens it to Lloyd’s negotiating new arrangements to offer insurance in countries where it had hitherto been unable to operate.

When Nelson joined Lloyd’s in 2011 he was seen as a friendlier face than his pugnacious predecessor Lord Levene. Insiders say he was best known for pressing ahead with the market’s attempts to extend its reach into new territories, and for providing a broader link between the market and the City, the banking world and the Government.

If you’re part of the EU, countries will sit up and talk to you because there’s a lot more at stake 

‘If I take India as an example, how long did it take to negotiate our Indian licence – about 15 years in total? I was lucky enough to be there when we signed it but it takes a long time,’ he says.

Brexiteers could argue that trade agreements are nothing like Lloyd’s licences. Nelson says in some ways, because they are more political, they might be more difficult. ‘People have strong views on them, both within parliaments if they are democracies, or within the administration, if you’re in China.

‘The other point is that the UK is a medium small economy. So the leverage we have – the clout – here is very limited. Whereas if you’re part of the EU these countries will sit up and talk to you because there’s a lot at stake. But there ain’t much at stake with the UK.’

He entered the fray after seeing international businesses raise their heads above the parapet, but it is time for UK business to make its voice known. ‘I think they should be speaking up. Businesses are after all the providers of the tax revenue and the prosperity in the country.’

Life and times of a financier who is still makes waves

'I was doing a lot of the privatisations when Mrs Thatcher came to power,' says Nelson

'I was doing a lot of the privatisations when Mrs Thatcher came to power,' says Nelson

‘I was doing a lot of the privatisations when Mrs Thatcher came to power,’ says Nelson

Born: July 26, 1947

Hobbies: Opera, sailing – ‘I’ve got a very elderly boat which I sail which I thoroughly enjoy’ – the arts.

Favourite operas: ‘I have several’.

Favourite composers: Mozart and Puccini.

Current job: On the board of trustees of the National Gallery. 

Family: Married to Caroline, he has three grown-up children and four grandchildren.

How he made it: ‘I was a corporate financier for Kleinwort Benson for about 16 years, then I went to Lazard, where I ran the London investment banking business for 13 or 14 years, after which I had four or five years with Credit Suisse First Boston. I had a great time in my career. I went through all the hostile takeover periods with Slater Walker and all that lot. Then in the late 1970s and early 1980s I was doing a lot of the privatisations when Mrs Thatcher came to power.’ 


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