Flying for the first time ever

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The world’s most incredible views: from the sky

As I marched through Southampton airport, I was focused on getting a large cup of tea before boarding a Sunday morning dawn flight to Spain.  I approached the queue at security feeling smug because all my toiletries were already in a regulation plastic bag, my laptop was out of my holdall and I had unzipped my boots ready to put them into the grey plastic tray and saunter through the electric gate like the veteran of flying that I was.  I initially didn’t notice the 50-something lady with the straw hat and immaculate make-up looking somewhat bewildered next to the smiley and sad face buttons of a ‘how have we done here today’ machine in departures that you’re supposed to press on your way through as an ‘on the go’ customer survey.  I stopped because she was the only person not rushing around furiously or carrying a sombrero.

While fingering an IKEA ziplocked bag with miniature shampoo and conditioner in it, she asked if her choice of container would pass muster with the bulldogs at security; “I’ve never flown before so this is all a bit new to me”, she said.  We compared plastic bags and I told her she would no doubt be fine, while gasping inwardly.  How, in 2018 had she never flown before.  Judging by her appearance (and it is dangerous to judge any book by its cover) and the makes of the toiletries in her bag, she was smart, probably educated and had spare cash.  So how was she one of the apparently only 22% of Britons who have never travelled in a plane (according to a survey by Kayak, a travel website)?  I asked if she was nervous or excited and she answered “a bit nervous but mostly excited; I’m going to visit a friend who’s moved to Spain”.

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Later at the departures gate there was a bit of a commotion in the queue ahead of me when a passenger told the Flybe operator that they were not comfortable in an exit seat. Seats had been allocated randomly and the Flybe employee had asked the question on the assumption it was a no-brainer. Exit seats have much more leg room so tend to be at a premium.  But it was my friend on her maiden flight and she wasn’t “at all sure I could open the door if I needed to”.  I told her if it came to that we were all in trouble and that flying was the safest form of travel, but she was clearly not going to enjoy the flight with the burden of even the slightest of probabilities.  So I offered to swap seats.  I was her rather embarrassed hero as I settled into her original seat, the spacious and neighbour-free 1A on the propeller-driven Q400 Dash 8 aircraft, and she made her way back to the considerably more cramped seat 11A.

This was just a 2 and a half hour flight to Spain on a budget airline and even though I absolutely love flying, I was focused on just getting to destination and getting the job done.  On this occasion I had been completely taking the journey for granted.  So as we pulled out of our stand, I tried to put myself in this lady’s shoes, seeing all this for the first time:

I actually watched the safety demonstration closely.  If you really think about it, it is somewhat alarming – albeit necessary – that someone stands there calmly telling you how to inflate a lifevest, “topping it up here” and “with a light and whistle to attract attention here”.  I mean, where else do you go where the first thing you’re told is what to do in the worst-case scenario?  Hardly something to fill you with confidence on your first ever trip; no wonder she didn’t want to have to contend with opening the emergency door too.

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Ready for take-off

I got a pang of disappointment on her behalf that she was experiencing flying in the modern age of budget travel and had missed out on the glamorous old days of flying where you were offered a drink on take-off (usually served on a small square napkin with some peanuts and always with lemon and ice even if you’d only asked for water).  You were then served a meal (included in the price of your ticket) and it was served with metal cutlery and a warm smile (with the notable exception of one 26-hour Alitalia flight when I was about 10 years old where the air hostesses made absolutely sure we felt their pain too) by an immaculate air hostess.  To be fair, Sarah and her colleague – now called cabin attendants – were lovely and very professional.  Both even had the colourful scarves tied around their necks at a jaunty angle, harking back to British Airways adverts in the 1980s when the airline’s logo was “We’ll take more care of you” and they really did. Now you get the hospitality and warmth of that VIP treatment, but only if you’re paying the VIP prices.

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Dawn above the clouds

The lady did get one priceless treat though; we took off as the pink dawn broke over clear skies and we flew low over the unmistakable wide Thames snaking through Greater London. Small marinas dotted around the tributaries and on the coast, the toy yachts carefully lined up in their berths. She couldn’t have picked a better day to see the world from the air.  We reached the top of the climb and you could almost touch the white fluffy cotton wool clouds as we passed them and settled at cruising altitude just above the duvet with a golden glow from the early sun.

Arrival in Alicante was equally spectacular.  With only the odd wisp of cloud, the temperature was “nudging 30 degrees” according to the Captain.  The rising tower blocks of the Costa Brava and the scattered bright blue squares of swimming pools nestled incongruously against the moonscape of the limestone peaks of the Alicante mountains.  The sea, dotted with pleasure boats and larger ships further out, stretched as far as the eye could see.

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The Alicante mountains

We touched down with barely a bump and trundled round to our stand.  It was textbook and probably the ideal flight on which to travel for the first time.  As I disembarked, my mind went back to business and I strode off to find the sign with my name on it in arrivals.  I hope the lady in 11A enjoyed her first flight and – holiday notwithstanding – cannot wait for the return journey.  She certainly helped to remind me of the magic of flying.  Even on the shortest flights and even in an age when commercial imperatives have binned much of the glamour and the fast pace of life has taken some of the sheen off, it remains one of the wonders of our age.  No amount of budget packaging or familiarity should take away from the fact you can eat breakfast on one continent, lunch in the air, and be ready for dinner on the other side of the world.  We can admire the most spectacular views in the world, all while somehow travelling at hundreds of miles per hour up at 30 thousand feet in a tin can.  I don’t know about the lady now relaxing in Alicante with her friend, but I’m already looking forward to my next take-off.

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Landed safely

 

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KNUCKLEHEADS – A hidden gem on the other side of the tracks in Kansas City (Part 3/3)

PART 3/3 – A MUSICAL PRIVILEGE

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Knuckleheads – settling in for a musical treat

Equipped with glasses of Bourbon and chilled cans of Kansas-brewed beer, we perched on stools in the shady area, alongside a pair of toe-tapping cowboy boots and bright pink cropped top.  And onto the stage came Scotty Dennis and his incredible voice.

Wearing jeans and a short-sleaved panelled shirt with a baseball cap and dark glasses, Scotty was about 6 feet tall and a big strong man with lungs to match.  He oozed soul as he sang Eric Clapton’s “Five Long Years” and gave the Fabulous Thunderbirds’ “Wait on Time” an epic Blues makeover, making the hairs on my arms stand on end.  Through the loud beat thumping out of the speakers, John shouted in my ear that it would put hairs on my chest, but I think he was referring to the rather strong Bourbon he was sampling in small shot glasses, rather than our friend Dennis. As the big man wandered past our table after his set, we couldn’t help gushing at him how brilliant he was. Ever the professional, he handed me a card for his band Scotty and the Soultones, told me about his recording contract and when his next album was coming out, before ‘disappearing’ me into a huge bear hug.  I got a faceful of pecs and biceps and a drawled deep gravelly “Thank you Lorna” in my one uncompromised ear.  He could sing to me anytime.

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The big man with the big voice – Scotty Dennis

As the resident band carried on and Dennis worked his audience shaking hands and hugging people all around, country music followed soul and the scorching sun over Kansas City continued to burn the necks and shoulders in the seats in front of us.

As the afternoon jamming session was drawing to a close, a striking looking woman, with dramatically black cropped and shaved hair with a shock of orange on top, heavy eye make-up and covered in tattoos made her way towards the stage.  She was one of the few non-bikers at the venue and had been noticeable throughout the afternoon for sitting quietly at one of the picnic tables near the stage.  She had spent that time watching and filming her friend on her phone.  The friend was tall and lithe with long bleach blond hair extensions, ‘boyfriend’ torn jeans, and a cropped knotted T-shirt showing off a very tanned and taut midriff and was making the most of her fabulous figure.  About 30 years younger and at least fifty pounds lighter than most of the biker ladies boogeying on the dance gravel, and with legs up to her armpits, the friend threw her legs up into splits high kicks repeatedly, posed suggestively, laughed theatrically and threw her head forward and back swishing her extensions like a mane in the manner of a shampoo advert.  But when Megan Ruger took to the stage and picked up the microphone, her platinum friend became photographer, general groupie and proudest fan.  Megan kicked off her shoes and – in her ripped jeans, socks, Rock n Roll black T-Shirt and Ray Ban Aviator glasses – was, as Simon Cowell might say, “stripped back”. And she had a voice worth waiting for. She flipped from country to rock with ease.  She projected gutsy chesty notes across the train tracks, talked through some toe-tapping old country favourite lyrics and held the most delicate breathy high notes while holding the band and the audience under her spell throughout.  I might even have got up for a bit of a dance so she must have been doing something right.

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Megan Ruger

It turned out Megan and her friend were visiting for a couple of days from Vegas, where she is currently appearing in a tribute show (John and I found this out by shamelessly fawning over her like two groupies when she grabbed a beer at the bar).  Her friend was probably, judging by her dancing moves, in another show in Vegas.  Megan had spent some time in Nashville and, keen to pursue her love for rock rather than country, had gone to Vegas.  The old favourite country songs and her rock renditions of “Keep Your Hands to Yourself” “Sweet Home Chicago” had everyone on their feet.

Who knew that such a gem as Knuckleheads could be found on the wrong side of the tracks in Kansas City hidden in amongst the industrial hangars and deafening horns of passing freight trains.  What a revelation of a Sunday afternoon… my friends and I were welcomed into the bikers’ haven like old friends, served inexpensive cold beer and lip-smacking barbecue meat.  But most of all for a small optional donation into a bucket, we were entertained by a talented band of musicians who played for the best part of five hours and by two standout performers.  They sang live – no frills and nothing but musicians to support them – and had talent and voices that would put many of the popstrels, boybands and divas in the charts today to shame.

The X Factor and American Idol don’t know what they’re missing, and I hope Dennis and Megan get to perform in their own right to sell-out arenas.  But just for that Sunday in Kansas City, I felt selfishly thrilled to have our own intimate live gig, and the music world’s loss – at least temporarily – was our gain.

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A musical treat

 

 

KNUCKLEHEADS – A hidden gem on the other side of the tracks in Kansas City (Part 2/3)

PART 2/3 – BLENDING IN….IN HARLEY HEAVEN

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We’ve arrived?

With a name like Knuckleheads, its location should not have come as a surprise and – in hindsight – its clientele probably should not have either.  Glowing profusely in the scorching midday sun and humid 35C degree heat – having been shivering in the taxi’s air conditioning just seconds before –  and dragging our weekend bags behind us, we made our way toward the heavy beat.  A simple gate entrance led us into a dusty bit of road, temporarily turned into the Knuckleheads parking area.

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Knuckleheads, Kansas City

Over a hundred Harley Davidson motorbikes stood glinting in the blinding sunshine, guarded by a heavily tattooed man wearing black wraparound shades below a bandana-covered head and sporting an impressive handlebar moustache.  As he was busily tucking into what looked like half a fried chicken and had both his large muscular arms and his mouth full, I thought John and I might just be able to take him on.  Thankfully we never had to find out as he gave us an apologetic greasy smile as he wiped his mouth, said “Howdy” and waved us in.

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The entire hangar wall at the entrance to Knuckleheads was a shrine to musical greats – with huge black and white graffiti type paintings of artists ranging from Prince to John Lennon, and Johnny Cash to James Brown.

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A shrine to musical greats

John and I eventually tracked Witek down – our concern that he might have been taken round the back and filled in was unfounded – and were able to dispose of our travel bags in his hire car.  Relieved that we would now be able to truly blend in, we made our way through the throng of black Harley Davidson T-Shirts, bushy sideburns and ponytails (the men), rhinestoned bandanas and unfeasibly tight and trendily torn jeans (the ladies) and lengths of skin adorned with garish tattoos depicting skulls, American flags and what looked like scenes from horror movies (both).

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Beards, beer and bandanas

Inside, Knuckleheads had a basic outdoor stage constructed from what looked like scaffolding poles and wooden slats, facing a small gravel dance area and a collection of wooden picnic tables and benches.  Further back and under the shade of a protruding roof, were long bar tables with stools down either side.  Further back still, was an indoor warren of smaller rooms with stages and seating areas. Dotted inside and out, were bars cluttered with neon lights and rows of different types of beers and Bourbon, and a brightly lit hatch where you could order the ubiquitous Kansas BBQ food. Every wall was covered from top to bottom with music memorabilia, cowboy hats and plaques shouting philosophical statements.

As I stood trying to read a sign that was perched upside down over a doorway, I came face to face with a T-Shirt that read ‘Harley Fucking Davidson” stretched over a very large pair of breasts.  I stumbled out of the way feeling thoroughly inadequate, un-motto’d as I was in my patterned linen shirt.  I needn’t have worried.  John, anticipating my unease, reappeared having bought me a memento of our visit – a bright pink T-Shirt with ‘Knuckleheads’ emblazoned across it.  I resolved to wear it on Monday back at Fort Leavenworth for our first session back in class, as an adviser to the US and UK military on their joint military planning exercise.

Next Part 3/3: A Musical Privilege…

 

KNUCKLEHEADS – A hidden Gem on the other side of the tracks in Kansas City (Part 1/3)

PART 1/3 – FROM KANSAS CITY BRUNCH TO KANSAS KNUCKLEHEAD KNOCK-OUT

I had finished my spot of retail therapy in the neatly aligned four blocks of the disconcertingly modern and clean shopping district, Central Plaza, in Kansas City.  Showing great restraint, I had managed to limit myself to just two books from Barnes & Noble and an overpriced but irresistibly cute pair of leggings covered in whales for my baby daughter (she’s a huge fan and shouts ‘Bubba! Bubba!’ at every picture of a whale).  My colleague and friend John and I had indulged in a leisurely brunch under a parasol on the terrace of the Classic Cup Cafe – it was Sunday morning, gloriously sunny, there was some quality people-watching to be done and we had a rare day off.   I was tucking into another carb-heavy meal – a treat of American pancakes covered in melting butter and maple syrup with a side of bacon.  John – a well travelled and hugely experienced humanitarian worker with a penchant for good food and lethal cocktails – was feeling smug after opting for the moderately healthier option of ‘crab benedict’; basically eggs benedict with crab cakes instead of an English muffin.  His dish had spinach on it.  It meant at least one of us had succeeded, for the first time in our two week work trip, to consume one of our ‘five-a-day’.

Our colleague and venerable team leader on this trip, Witek, had raved about a bar and music venue on the outskirts of town, that played live music on Sunday afternoons.  We were not sure what to expect but thought why not?

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Kansas City’s Union Station

As our Uber made its way past the impressive Union Station, along the cosmopolitan and eclectic River Market in the North end of Kansas City and left the business centre and dormant night spots of the Power and Light district behind, we wondered where our driver was taking us.  Heading East along the river, we gradually found ourselves with train tracks running either side of the dusty single lane road, wasteland on one side and an industrial area made up of large warehouses and the odd metal water tower on the other.  I began to wonder if I was suffering a repeat of my cab drive from hell on my visit to Kansas almost exactly a year ago or if we had distracted our Palestinian driver so much with our questions about immigrants in Trump’s America, that he had driven off the page on Google Maps.

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Road to nowhere?

The Uber came to an unexpected halt near an open parking lot full of outsized pick-ups and John and I looked at each other with a hint of alarm.  With a “We’re here”, our driver was drowned out by the sudden sound of a mile-long freight train honking its way through a level crossing a few feet away from our parking spot.  I felt like the main character Ariel in the movie Footloose, when she and her small-town friends spend their evenings playing chicken with freight trains by standing on the tracks screaming at the oncoming beast, as its driver frantically pulls the horn to get them to move.  At the last minute, Kevin Bacon’s heartthrob out-of-towner character leaps to get Ariel out of the path of the speeding train as the classic 80s Bonnie Tyler soundtrack crescendos in the background.  Clearly in my case, I wasn’t standing in front of the train, I wasn’t screaming or wearing red cowboy boots (“I wear ‘em cawz my Daddy hates ‘em”). And my friend John standing looking perplexed in his shorts, t-shirt and flip flops – absolutely lovely though he is – was no leaping life-saving Kevin Bacon.  Suffice to say it brought back memories of 80s classic movies, so many of which depicted ‘authentic’ middle America, and which for so many of us Europeans, were our earliest and sometimes only exposure to places like Kansas.

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Footloose’s honking freight train without Kevin Bacon

As noise of the freight train subsided, John and I noticed a loud throbbing beat and the sound of some serious soul being belted out nearby.  Then I noticed the squiggly neon sign – scrawled in handwritten font – across the nearest hangar: ‘Knuckleheads’.  We had arrived.

Part 2/3 next: Blending in….in Harley heaven…

Surviving a taxi ride in Kansas

I expect a taxi driver to be able to drive. I expect cab drivers to have a vague knowledge of their local area. Maybe I’m just too demanding. Either way, yesterday I had to adjust those expectations radically. I was in Fort Leavenworth and had aspirations to get to Kansas City before nightfall. Leaving at around 3pm with about a 45 minute car journey ahead, I thought this was more than manageable. I should have known things were not going to go my way when the cab eventually turned up over an hour later, after three calls to remind the local firm that I was still waiting.

The battered saloon car coughed up to the porch and a large very sweaty looking middle-aged woman chewing gum noisily – in that way that suggests it’s a necessity rather than enjoyable – turned around from the driver’s seat as I slid across the back bench with my bag, looking at me as if I’d got into the wrong car. There was a meter and a taxi light attached to the roof of the car so I was pretty sure I hadn’t just hijacked an unfortunate local out for a drive to the local Walmart. I checked and she was indeed my designated cab driver. What an odd manner given her career choice in the service industry. As it would turn out she was just terrified of driving and in entirely the wrong profession.

We set off through Leavenworth town and all seemed well. I should have picked up when she asked for the third time where I was going that she was perhaps not as experienced as her age and the battered old 2-way radio suggested. She talked about the difficulty of following “the blue blob that is my car you know” as she unconvincingly juggled the Google Map screen on her phone with the steering wheel. She then started talking. To begin with I thought she was being friendly – like so many of the locals who invariably gave us a warm welcome when we came to Fort Leavenworth. Then I realised she was just talking, talking to herself continuously; a sort of mantra to calm herself down. Occasionally the odd comment was directed at me and it was clear a soothing response was expected. When at first I didn’t pick up on this, my driver’s control of the car faltered and she showed a propensity to swerve across lanes into truck-like vehicles – much larger and sturdier than our saloon car – to avoid imaginary threats. So I dutifully chipped in with “it’s ok, keep going straight on” and “don’t worry about the other drivers”, as the gum chewing behind the wheel grew louder and the smell of nervous sweat reached my nostrils.

As we approached the city, brake lights lined up ahead, unsurprisingly given that it was now rush hour on a Friday evening. The chewer in the front muttered quietly in a voice of shocked desperation: “oh my lord, there’s traffic”. There was a 2 second high point when the traffic cleared, but it was short-lived. As the skyscrapers of the city loomed over the freeway ahead of us, she said “oh my lord, Kansas City is so big”. Seconds later I saw my life flash before me as my sweaty friend dropped her phone into the foot well of the passenger seat, panicked that she was meant to be coming off the freeway, reached down into the foot well bringing the steering wheel violently round with her and ploughed us through the hashed area towards a large metal bollarded area in between the freeway and the ‘off ramp’. We cleared the bollards. Just. At this point, I took over. I held her shoulders from the back seat, brought up the route on my own phone, and ordered her to look straight ahead with a “do as I say” and “just drive”. I was hijacking a Leavenworth local after all.  She said “thank you, thank you” and “I don’t like to let my customers down”. I wasn’t sure how she felt about turning her customers into messy roadkill.

It took us another 45 minutes of missing turn offs because she “wasn’t quite ready’, or was “scared because of that big red truck”, or “was concentrating because I’ve been told to keep both hands on the wheel”, but we made it eventually. We pulled up outside the hotel and I breathed a sigh of relief. I felt like the driving instructor whose least favourite student had just made it to the end of the test – had failed but had at least got instructor and student to destination without killing anyone.

Suddenly, the large sweat patches on her oversized red top dried out and the frantic gum masticating subsided. My incompetent driver announced loudly: “that’ll be 58 dollars now darlin”. I almost laughed out loud: she HAD to be kidding. But I did pay up – albeit while fulfilling my British stereotype.  I handed over the notes politely but muttered under my breath at the outrage: I expected a taxi driver to be able to drive. I expected a taxi driver to a vague idea of their local area…

Maybe it was the relief to have finally made it to my destination in one piece or maybe I just couldn’t face arguing or spending another minute with her. Or maybe I could afford to be generous: I was about to sip a cocktail while taking in the view of Kansas City from the rooftop bar of my hotel. My sweaty friend was about to embark on a nightmare return trip to Leavenworth. Through rush hour traffic. Searching in vain for the blue blob “that was her car you know”, on Google Maps. Sweating profusely and masticating loudly.  And – now – on her own.

An unexpected break from the relentless 21st Century treadmill

There’s nothing quite like a vomiting bug to give you a break from the relentless pace and expectations of life. Last week I found myself quarantined indoors having caught something with symptoms similar to the Norovirus. We had been to a toddlers’ party and four of us from our group of friends came home with the crippling bug. So I was kept away from the world so noone else would breathe in the pestilence.

Of course, had it just been me, I could have made a bit of a break of it: I would have happily curled up on the sofa with a large duvet and a well-placed bucket. I would have watched Strictly Come Dancing on catch-up, attempting mouthfuls of sugar water and felt sorry for myself until the waves of retching after every sip had passed and I could resume my relationship with the world and Nandos.

With a 14-month old in the house, there is no languishing on any sofa at any time – whether you’re just feeling lazy or your stomach muscles are having the biggest workout they’ve had in years courtesy of Armitage Shanks. There is a continuous requirement to be the most entertaining person in the world, play horsey and give chase around the dining room table on all fours.

But being sequestered from the world did at least give me a break from the daily expectation that I would be all over social media, respond to emails within minutes and deliver work earlier than the deadline I had been given. My entire schedule and all my deadlines flew out of the window. And in this instance, you may as well accept it straight away, as torturing yourself over what’s not getting done doesn’t get you anywhere and there’s nothing you can do about it anyway. In our case, our nanny also left the house faster than you could say Dettol once there was some suggestion that the stomach bug in question might be catching. And she would not be back until said bug had been clear (and preferably fumigated) of our house for at least 48 hours. So I was left holding the baby as well as the bucket.

All plans for the next few days were cancelled, all social visits turned off. I took half an hour to cancel forthcoming language exams, presentations to high-ranking military officers, drafting of training protocols, and advised my mother not to come and stay unless she was equipped with a biological warfare suit and breathing apparatus (she paid no notice and came to stay to help out regardless – because that’s what mums do). We hunkered down until the virus has done its damage and moved on to its next victims.

Thankfully for our battered and lighter (hurrah!) bodies, that day is now upon us. We may air the rooms and emerge from our isolation to inspect the damage. Having been out of the picture for the best part of a week though, it has made me think we should do this more often – preferably without the virus. Much as we like to think it doesn’t, the world does continue turning if we step off it for a minute and a missed deadline may be inconvenient and on occasion costly, but in most cases any resulting upset can be remedied. So I will be switching off my phone and email more often in future – with some notice to clients and friends of course – and enjoying the odd moment of sequestration from the relentless treadmill of 21st century life.

The City of London and Brexit – threat or opportunity?

Author: Alastair Sutton – diplomat, lawyer and advisor on European law and affairs for over 40 years.

Background – the “new settlement” of February 2016

The purpose of this paper is to consider the impact of UK withdrawal from the European Union (EU) on the UK financial services sector and the importance of this sector to the EU. Before doing so however, a short comment on the “Cameron package” establishing “a new settlement” for the UK within the EU is appropriate. As a leading financial centre outside the Eurozone, the key provisions for the City of London are in the section on economic governance. The UK’s commitment here is not to create obstacles and to facilitate the further deepening of the economic and monetary union. In exchange, the Union is to respect the rights and competences of non-euro Member States, notably in the internal market.

It is recognised that the single rulebook to be applied by all credit and other financial institutions may need to be “conceived in a more uniform manner than corresponding rules to be applied by States that do not take part in the banking union.” The latter are exonerated from “bail-outs” for Eurozone States. Emphasis is given to the need to “respect the internal market” whenever measures affecting the Eurozone are adopted. A “safeguard clause” (or, more accurately, a “consultation clause”) is included, whereby the UK may “ask the President of the European Council that an issue relating to the application of this Decision be discussed in the European Council”, where “due account will be taken of the possible urgency of the matter”.

Without questioning the good faith of the 27 Member States which have agreed to this provision, the “integrity” of the UK’s participation in the single financial services market in the future may depend on the extent to which a genuine monetary, economic and fiscal union is achieved. The growing inter-relationship between financial services and these wider policy areas (with a broader supervisory role for the European Central Bank), the development of a banking and capital markets union and Eurozone institutions which exclude the UK, may – in fact if not in law – limit the benefits available to UK financial operators in ways which are not easy to predict. However, the UK is already “semi-detached” from the rest of the EU, as a result of 6 Protocols derogating from core areas of EU law and policy. This separation can only grow to the extent that the Eurozone takes on the characteristics of a genuine single economiy.

The best of both worlds for the UK?

The Government’s White Paper of February 2016 is an attempt to inform the UK electorate about the “new settlement” (and the advantages of remaining in the EU) as required by the EU referendum Act 2015. The Paper highlights the cardinal importance of access to EU markets for the UK financial services sector which “employs over one million persons across the UK, constitutes over 7% of UK economic output, 13% of UK exports and a trade surplus of £60 billion.” The Paper concludes that the UK’s special status in the EU is one which “no arrangement outside the EU could match.” It points (correctly in my view) to “years of disruption and the uncertainty of leaving for an unknown destination outside” in the case of Brexit.

Against this background, I now summarise some of the factors involved in the Brexit debate as regards financial services and the City of London.

A unique range of products and activities

The terms “financial services” and “City of London” are frequently invoked in the Brexit debate, but both cover a wide variety of service sectors. These include retail, wholesale and investment banking, all branches of insurance and re-insurance, pension fund management and “investment services” (including hedge funds, derivatives, UCITS and alternative investment fund management), as well as ancillary activities such as audit and accounting, legal, IT and other consultancy services.

Under the “umbrella” of the G20 following its meeting in London in 2009, EU law in all these sectors has expanded exponentially. European Rulebooks in banking (CRD IV), insurance (Solvency II), hedge funds and private equity (AIFMD), derivatives (EMIR), UCITS IV, short-selling and credit default swaps, credit rating agencies, financial benchmarks and venture capital funds are only some of the measures which have been proposed, amended or enacted since the end of 2007. In parallel with new measures to deepen the Eurozone and to create capital markets and a banking union, the EU (with the technical assistance of European Supervisory Authorities since 2011) has enacted “multi-layered” measures running to thousands of pages. The process is ongoing, even if the emphasis is gradually shifting to enforcement and supervisory convergence.

In many if not all of these areas, the EU has moved ahead of the rest of the world and considers that its Rulebooks set new global standards. This is not always accepted by the EU’s partners, including the United States with its Dodd-Frank legislation and many Asian financial centres such as Singapore. But at least for those countries which depend on EU markets, there is little choice other than to align with EU regulatory and supervisory standards.

The City of London is a leading global capital market as well as a centre for financial services. There is an important (and often overlooked) distinction between EU law on the cross-border provision of financial services and rules on capital movements. In the absence of special arrangements agreed by the EU for third countries (e.g. “equivalence” or “passporting”), the freedom to provide cross-border financial services is limited to operators with a corporate presence in the EU.

In contrast, capital movements such as cross-border investments are based on Article 63 TFEU, which provides for the removal of all restrictions for Member States and non-Member States alike. This unique provision in EU law would continue to benefit the UK (as well as American, Japanese, Russian, Chinese and Commonwealth) financial institutions based in London, even after Brexit. This would not be the case for the vast body of EU financial services law, which would cease to apply to the UK with the entry into force of the withdrawal arrangement provided for in Article 50 TEU.

The iconic value of financial services (and the “City of London”) for the UK – a view not shared in Europe

Partly as a result of the Brexit debate being dominated by the Westminster and Whitehall “villages”, as well as by London-based media, the importance of EU membership for the City of London has over-shadowed other sectors. “London” (both the City and the UK Government) has been a “driver” of EU financial services law even before the first EU Financial Services Action Plan (FSAP) in 1999. The UK is perhaps the most active of the small number (usually less than 10) of the 28 Member States which participate actively in Council legislative debates on technical issues, in investment services perhaps even more than in banking and insurance. Ironically for a Member State which often complains of excessive “red tape” in the EU, the UK has –more than any other Member State – enacted ”gold-plating” national rules to supplement EU directives.

On the other hand, the “iconic” status sometimes given to “financial services” in London is not shared in other Member States, some of whom (Frankfurt especially but also Paris, Milan and Amsterdam) may even relish the prospect of Brexit in order to attract business previously located in London. Many Member States continue to blame “London” (perhaps even more than the sub-prime crisis in the United States) for the hardship, insecurity and instability which European citizens still suffer as a result of the collapse of financial markets in 2007-8. They point, inter alia, to the loose and incomplete regulatory and supervisory culture which existed in the UK and in the EU before 2007, encouraging or permitting excessive risk-taking in complex financial instruments, incompetent management, corporate greed and inadequate supervision.

For many in Europe, it is these factors and not the systemic weaknesses of the eurozone which are the root cause of the current economic crisis. Most if not all “core” EU Member States see the function of financial services as being (primarily at least) to “oil the wheels” of the economy, rather than being a profit-making industry comparable to other sectors of the economy. Continental opposition to excessive bankers’ bonuses is merely one manifestation of the difference in approach to the financial services “industry” in the UK and across the Channel.

This profoundly-felt and lingering resentment will be an important underlying factor in any negotiation for a new relationship with the EU27 under Article 50 TEU. It does not bode well for the City in the event of Brexit.

Financial services in the Brexit campaign

Many of the general political and economic threats facing the UK in its withdrawal negotiations under Article 50 will apply to financial services. By far the most important of these is the absence of any ready alternative to EU membership. The failure of the Cameron administration (or indeed the “Brexiteers”) to offer the UK electorate any credible and quantified alternative to membership appears grossly irresponsible.

Not only are voters handicapped by over 40 years “misinformation” on the economic and political realities of EU membership, but this is compounded by a failure to spell out the possible alternatives, including their negotiability with the EU27 and with other potential partners. Those in favour of withdrawal have assumed or alleged (without any legal or factual justification) that a new arrangement guaranteeing continued access to the Single Market would be readily available because of the importance of the UK market for the EU27.

In fact and in law, the only arrangement offering comparable (but not identical) advantages in terms of market access is the European Economic Area (EEA) agreement, where the EU’s partners are Norway, Iceland and Liechtenstein. As with all other arrangements which the UK might seek under Article 50, membership of the EEA would of course require the consent not only of the EU27 but also the 3 partner States. It is most unlikely that this would be forthcoming. In any event however, the UK itself may not wish to enter an arrangement which provides for the free movement of persons (not to mention diminished participation in decision-making and a continued contribution to the EU budget) as the “price” to be paid for continued free movement of goods and services.

The level of political resentment at the EU having been “held to ransom” by an already “semi-detached” Member State (or at least its current government) in holding a referendum and forcing yet another time-consuming re-negotiation at a time when the Union is facing multiple existential threats from migration, Russian aggression, worsening unrest in the Middle East and Turkey and systemic economic stagnation in the Eurozone, has been seriously under-estimated in the UK. In addition, the untried but inevitably complex process of “de-negotiation and re-negotiation” involved in the Article 50 TEU withdrawal process, appears to have been over-looked, as has the bitter legacy of 40 years “Euroscepticism” by successive UK Governments.

Negotiating withdrawal under Article 50 TEU

In the event of a negative vote on 23 June, the UK Government will have to decide when (or whether) to “decide to withdraw from the Union in accordance with its own constitutional requirements” and “notify the European Council of its intention”. Thereafter, the Council would need to settle “guidelines” for the Union (of 27 Member States) to negotiate and conclude an agreement with the UK. The agreement would “set out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union”. Article 50 has never been used. It is not clear how long it would take for the Council to draw up the guidelines for the negotiation, whether these would be acceptable to the UK, how long the withdrawal negotiations would take, nor indeed whether there would be one or two negotiations leading to a single agreement on “dis-engagement and re-engagement”.

In any event, it is clear that after 42 years membership the international process of “legal disentanglement” would be of considerable complexity. Its accomplishment within the 2 year period referred to in Article 50(3) TEU[1] would depend not only on serious political will on both sides, but also the availability of time, when the Union is faced with other matters of far greater (European) importance. It is – to say the least – possible that an extension to the 2 year period would be necessary, even for “phase one” of the Article 50 process. In this respect, Article 50(3) provides that the Treaties “shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.” What would happen (apart from increased legal uncertainty) if such an extension were not granted is not clear.

Even if the “disentanglement” process could be completed within 2 years, it is not easy to imagine that a replacement agreement would be in place and operational within that time-span. Even assuming the necessary political will and consensus amongst the EU27 (including the European Parliament) – which in my view cannot be assumed – it is almost inconceivable that a new arrangement acceptable to both sides would be devised, negotiated and implemented within 2 years. This implies that the legal uncertainty which is already being felt in the UK would be likely to continue, perhaps as long as 5 years before a new legal framework was devised, negotiated and ratified by the UK and all 27 Member States.

What new arrangement for UK-EU27 relations?

On withdrawal, the UK would retain independent membership of international organisations such as the IMF, OECD and WTO), as well as global standard-setting bodies such as the Basel Committee, IOSCO and the IAIS. However, despite the undoubted importance of the City of London as a leading financial centre, it is unlikely that the UK would exercise the influence on global regulatory and supervisory activity outside the Union that it does as a Member State.

As far as its future bilateral relations with the EU are concerned, although Article 50 TEU appears to envisage the simultaneous negotiation of two arrangements, it is likely that any new arrangement would follow (or at least be conducted in parallel to) to the disengagement process. However, in order to avoid a legal vacuum and even greater legal uncertainty than already exists, both parts of the agreement envisaged by Article 50(2) should (ideally) enter into force simultaneously.

The EU27 would presumably be keen to resolve the withdrawal process as quickly as possible in order to “put their new house in order”. However, the same political will might not exist to negotiate quickly a new arrangement with the UK. Furthermore, the new arrangement would of course require a fully-fledged “negotiation”, different in character and scope from the arrangement on withdrawal in the narrow sense.

As far as market access for the UK financial services industry is concerned for example, it is (to say the least) unlikely that the EU27 would agree to the same (or similar) terms to those which exist under current EU law. On withdrawal, the UK would become a “third country”. The UK would however have a unique (and not necessarily favourable) status, unlike applicant States or other countries (such as the United States and Japan) with which the EU is already in negotiation.

It is inevitable that the UK’s 40 years “baggage” of constant criticism, dissent, hectoring and lecturing (at least at political level) would have an adverse political effect, both on the timing and substance of a new economic arrangement. There is no obvious reason why the EU27 (without UK participation in the Commission, Council and Parliament) should feel the need to grant favourable treatment to the UK, especially when their own access to UK markets, at least for manufactured goods, is legally guaranteed by the WTO agreements. The converse is of course not the case since, on withdrawal, the UK would face the common external trade barriers of the EU rather than the frontier-free internal market and would therefore need a preferential trade agreement with the EU as a matter of urgency.

A key issue therefore will be the scope of the new arrangement sought by the UK (as “demandeur”) and the extent to which this is acceptable to the EU27. Article 50(3) TEU provides that the withdrawing Member State “shall not participate in the discussions of the European Council or the Council” in the decisions concerning it. This would include (of course) the “internal” discussions in the European Council on the “guidelines” for the new agreement, as well as those in the Council of Ministers during the actual negotiations. The UK will therefore – in sharp contrast to the present situation – have no input into the EU “mandate” for the “arrangement” envisaged by Article 50 to replace the current legal framework.

Neither the Government nor those advocating withdrawal have set out with legal clarity any of the possible alternatives to EU membership. Loose talk about the negotiability of a “free trade” agreement (perhaps like Norway, Switzerland or Canada) disguise the fact that none of these agreements make provision for market access for financial services (or even goods) on the same basis as that provided by the law of the Single Market. Thus, even if a “classical” free trade agreement could preserve market access in the EU for manufactured and agricultural goods (provided that EU health, safety, environmental and consumer protection standards could be met), this would not be the case for financial and related services.

Against this unpromising background, there are – at least in theory – at least seven possible “models” for a UK-EU27 arrangement to replace EU membership. These are the EEA agreement, the Swiss approach (a “classical” free trade area agreement complemented by ad hoc bilateral agreements on areas of mutual interest[2]), the European Free Trade Association (EFTA) agreement, a “tailor-made” free trade agreement such as those recently concluded with Korea or Canada, a customs union agreement such as that with Turkey, an association agreement or, in the absence of any bilateral arrangement, reliance on the World Trade Organisation (WTO) agreements.

As far as financial services are concerned, none of these (so-called) alternatives – with the exception of the EEA – provide for market access in financial services, at least with the degree of automaticity guaranteed under EU law. All of these models are public international law agreements which lack direct effect in national law. Even if, therefore, the UK were able to negotiate a form of market access for banks, insurers and investment services industries on the “offer and concession” basis used in the WTO or in “classical” free trade agreements, UK companies would be unable to enforce their rights in the national law of 27 EU Member States.

It is of course not clear which – if any – of these arrangements would be acceptable to the EU27. But it appears that neither the UK Government nor the “Brexiteers” have yet chosen which model would best suit the UK’s interests.  My own view is that none of the existing “models” would reflect the UK’s needs nor (necessarily) the EU’s probable attitude to a Member State which had turned its back on the Union. A sui generis or tailor-made agreement would be necessary, but this of course would take longer to devise (especially on the EU27 side) and to negotiate. The treatment of financial and related services would be particularly sensitive – on both sides.

The cost of “self-exclusion” from the EU decision-making process

Given the size and attraction of the EU’s Single Market for third countries, participation in its decision-making process at all levels is crucial, even for small States. One driving factor behind the former EFTA countries’ desire to leave the EEA and join the EU in 1995 was the fact that the EEA membership provided for consultation rather than full participation in the institutional and committee structure of the EU.

EU financial services law (like all other areas of EU law and policy) is conceived, prepared, monitored, enforced and amended through processes and institutions which are primarily or exclusively open to EU Member States and private sector operators. The “shock” for UK regulators, supervisors and “stakeholders” in no longer participating in Council working groups, Commission-chaired sectoral consultative committees and the European Supervisory Authorities, is likely to be severe and damaging to UK interests.

The impact of withdrawal on UK law – the potential unravelling of UK law implementing EU rights and obligations

The legal, technical and indeed practical complexity of “unpicking” the legacy of 42 years assimilation of the “EU acquis” into UK law is almost inconceivable. As with the (untested) Article 50 process in general, the impact on legal certainty for business in the UK is obvious. It would be – to mix metaphors – a step in the dark, with no light at the end of the tunnel, perhaps for several years.

Of course, the disruptive effect of regulatory change in the UK would depend on the extent to which the UK authorities, after withdrawal, take the political decision to “dismantle” UK law implementing EU obligations. In practice, much of the relevant “acquis” on consumer and investor protection would need to be retained – especially in financial services – as a basis for “mutual recognition” or “equivalence”.   This may lead to questions why Brexit was necessary in the first place!

Conclusion

The current Brexit debate in the UK (where rhetoric tends to be divorced from reality) demonstrates above all that Brexit would be an irreversible economic and political gamble. On the one hand, Brexit would be based on the view that the EU was undemocratic, dysfunctional and unsustainable. Yet the economic future of the UK would depend significantly and ironically on the economic performance of the EU in general and the Eurozone in particular. In any event, whatever arguments may be made for other sectors of the UK economy, it appears (at least to me) that continued EU membership is vital for the City of London.

(First published in Spotlight)

[1] The Treaties shall cease to apply to the State in question from the date of entry into fore of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend the period.

[2] Switzerland currently has many such arrangements built up over the last 25 years, but excluding financial and related services.