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.

Brussels: a unique city and a survivor

Someone said to me yesterday “Brussels is that place you pass through on the way to France, it’s hardly somewhere you’d expect a major terrorist attack to take place”. For me Brussels is a second home, it is the city I grew up in, it is one of the safest places on earth and somewhere I have escaped to over the years for a bit of family time and peace and quiet. It is far more than ‘somewhere to pass through’ but I would agree that until recently, it is the last place I would have expected a terror attack to be staged.

Brussels is a vibrant cosmopolitan city, with a different language spoken on every corner, a colourful blend of cultures down every cobbled street; its centre sprinkled with just as many cultural attractions, architectural feats, history, entertainment, parks and forests as it is the EU institutions everyone associates with the ‘capital of Europe’.

It has, in my opinion, an unfair reputation for being a dull and grey hub of European bureaucracy. In my experience that view is often held by visitors who swing through for a few hours on business, or those who are en route to France and see nothing more than the ring road. You would hardly judge London on a fleeting meeting, a stay in a big hotel chain or a few hours spent in traffic on the M25, would you?

For those of us who have lived there, the city devastated by yesterday’s attacks has far more to offer.

Brussels is today the crossroads of Europe and has been at the centre of some of the greatest wars of recent decades and some of the most momentus peace negotiations. It has survived invasions, continuous decades-long internal clashes between its multi-lingual and proudly different Flanders and Wallonia regions. In recent years, it somehow maintained its integrity and a functioning economy through nearly two years of political chaos when the leadership was incapable of forming a government – a record outdoing even governmental procrastination in Iraq.

Belgium’s history and its colonial past as a melting pot of cultures and languages has left a rich legacy of Renaissance architecture, beautiful medieval old towns jostling with Art Nouveau quarters, immaculately maintained memorials and historic battlefields, the unmissable ‘Atomium’, the lavishly ornate towers of the Grand’Place in central Brussels and a vast array of nationalities living side by side. And whatever you may think about the European Union, Brussels nurtures the story of over 70 years’ of our history as Europeans, the incredible journey of our continent from a fragmented collection of battered, bloodied and penniless battlefields to a (relatively) united and serious player in the global arena.

The mix of cultures has also left the country with what I think is some of the best food in Europe. I like to think of traditional Belgian fare as having the quality of French food, but served in German quantities – the perfect combination. Whether it is seafood – the traditional ‘moules frites’ – or meat – slabs of it served practically still ‘moo-ing’ all the way to ‘bien cuit’ depending on your taste or stewed in a Flemish ‘Carbonade’, or game hunted in the Ardennes – it is all served with a hustle and a suitably brusque waiter. In the most traditional of eateries, he will scribble your order on the table cloth, memorise the list, disappear and return with every dish memorised perfectly.

If you are not careful you could spend just as long picking which beer to sample, many bars routinely supplying pages and pages of varying strength and flavours brewed in different regions and all served in their own specific glass. And to finish, if you can manage it, there is always a mountain of chocolate and vanilla ice-cream lathered in hot sauce and crème Chantilly – the ‘Dame Blanche’ – and mouth-watering Belgian chocolates to savour with a glass of Calvados and ‘un petit café’ to finish off.

Clearly growing up there gave me a well-developed appreciation of gastronomy. But more importantly, Brussels was one of the most colourful but also safest places for a child and then a teenager to grow up. My siblings and I had the freedom to find our own way, without our parents worrying about violence or crime to the same extent as they might have had to in another capital city. That’s not to say Brussels does not have its issues, its crime rate, its poverty.

But on the whole, Brussels provided us with big-city cosmopolitan exposure with a feeling that we were in the thick of global events, but somehow also gave us a level of safety and sense of calm community that meant we could go and discover life and make our own mistakes without running any great risks (or giving my parents a heart attack). Having lived and worked in a number of other European capital cities since, I have yet to find another one that offers that unique environment. I still consider Brussels a home and every time I go back, I breathe a contented sigh of relief that it has not changed.

Tuesday’s cowardly attacks on Brussels have left people frightened, shocked, angry and grieving. But there is also a sense of community and defiance. Let’s face it, Brussels and Belgium have seen it all over the decades and are still standing strong. It will no doubt take some time to recover and those affected will not be forgotten, but the ‘Belges’ and the cohort of multi-national multi-cultural adopted ‘Belges’ like myself will not allow cowardly attacks like this to change the country or its capital city. It is far too strong for that.

 

 

 

‘Driech’ in the Highlands

scotland2

I’m sitting in a coffee shop in a small town called Pitlochry in the Highlands of Scotland.  Storm Frank is in full swing outside.  The sky is a dark shade of grey, the rain is horizontal and relentless. The entire valley – or glen – has been turned into a series of great lakes with small fishing sheds and treetops poking incongruously out of the middle of them.  Both the Tay and the Tummel have burst their banks and there is flooding of biblical proportions.  We’ve been lucky – our cottage further down the valley is just high enough up the hill to be above the waterline but the cat has her wellies ready and her eye on her favourite Christmas bauble just in case.

I cycled the 6 miles over the hills to this the nearest coffee shop, from a hamlet called Logierait.  My wheels covered more water than road and my trousers are now dripping onto the polished wooden floor.  I’ve just picked another lump of mud (I think – although it could be cow dung) off my cheek and have been edging my sodden boots towards the big open fireplace near the end of the table.

scotland3

Believe it or not, this is when Scotland comes into its own.  On days like this when I have lost sensation in my toes, my ageing and injured hamstring is crying out for a hot bath and I am reminded as I glance at the sleeve of my fleece that half-way through one of the downhills I may have used it to blow my streaming nose.   When I am covered in mud from head to toe, am so wet that even my underwear needs wringing out and my cheeks are stinging from a combination of hail, rain, sleet and snow.  It is only then that I can truly appreciate the crackling log fire and the huge pot of tea served by the welcoming and chatty landlord who makes a passing comment about how ‘driech’ it is outside and doesn’t blink an eye when I position my wet feet so close to the fire grate steam rises off them.

scotland1

It is tempting then to sit back into the weathered leather armchair, read my book and nod off against one of the soft tartan cushions but the waters are rising and what is left of the afternoon light is fading fast.  I have squeezed the last drop out of my pot of tea, that was definitely a drying splatter of cow pat not mud, and I still have the cycle-wade-swim home to tackle.  I don my snotty fleece and damp waterproof, reluctantly remove my soggy boots from the fire place and head back out into Frank’s path.  I will be back at the cottage soon, and it is only 6 miles away.  But thanks to the Scottish hills and weather, my cycle will have been an adventure and the open fires, mugs of tea, wee dram of whisky and cosy evenings a delicious reward for venturing out.

warmth1

A Patch Of dust That Changed History

Battlefield tour Isandlwana-Ward

A patch of dust that changed history

The notion of a ‘Battlefield Tour’ may evoke stuffy old historians going into intricate detail about some long-forgotten battle and a load of incomprehensible jargon. To many it is a niche pursuit solely reserved for military types, collectors of antique weaponry and nerds. Even to those who have previously ventured out on one – or been compelled to during their studies – it may mean disembarking from a perfectly warm and dry coach to stand around in a muddy field before being asked to conjure out of the grey drizzle of a Belgian farmer’s field ‘columns of tanks’ and ‘Battalions of advancing troops’ effecting ‘flanking’ movements into the enemy’s ‘rear guard’.

I am a military spotter, have a passion for history and an unhealthily creative imagination. So even driving rain, the cold and an unhelpful Belgian farmer would be unlikely to put me off. But for those who do think battlefield tours are all a bit of a waste of time, dull or irrelevant, I would say you have not been to Fugitives’ Drift in Kwazulu Natal, South Africa. Take away the term battlefield tour, take away the dusty books, take away the military jargon. Replace them with exceptional stories of bravery, superhuman survival, incredible odds, superb military tactics, costly errors, leadership, pride, insubordination, alleged cowardice and unimaginably savage violence. On both sides. At Isandlwana, a force of over 1200 British troops – an entire battalion – was wiped out by the Zulus, “savages with sticks”. The latter only hours later, saw just 140 British soldiers, many sick and wounded, successfully hold their small missionary post, fending off repeated attacks by up to 3000 Zulus.

Rorke's Drift2-Ward

The tiny and isolated post – Rorke’s Drift – held by 140 British against 3000 Zulus

Our guides transported us to 19th century South Africa, and a dusty brown plain in what was then on the border of Natal and the kingdom of Zululand. They told us the stories of Isandlwana and Rorke’s Drift.

We were plunged into the period, the political tensions and were introduced to the characters one by one. We felt the unbearable heat of the woollen ‘red coats’ and the excruciatingly ill-fitting steel-capped boots. We stood on the spots where hundreds of men fell in the space of minutes, skewered by Asagai spears or exploded by the then state of the art Martini-Henry rifles. These battles had more drama, colour and highs and lows than the very best Hollywood blockbuster.

We delved into the context, the repercussions and drew out the important lessons in history that are still applicable to the complicated, violent and messy world we live in today. The stories reminded us of the power of the media – even back in the 19th century – to influence the public’s perception of a war fought thousands of miles away. We heard witness contributions from both the British and Zulu sides, and extracts from the press articles and historical reports written in the months following. These highlighted the bias and inaccuracy – and national pride, political influence and selective memory – that creeps into chronicles of historical events.

Beyond the political and military story, we were introduced to the soldiers and warriors themselves, through their oral testimonies passed down through generations of Zulus, and through the desperate final lines scribbled to mothers and sisters back in Britain. They were young warriors who had to blood their spears before they could hope to attract a wife. They were terrified 19-year old boys barely out of training, thousands of miles from home, battling disease, a climate and an environment they could never have imagined.

Rorke's Drift-Ward

Rorke’s Drift

Thousands died on the field of battle, fighting literally to the death in hand-to-hand combat as they clambered over the bleeding corpses of their friends and colleagues. Those lucky enough to survive on the British side went home to a nation that had barely heard of Zululand or Rorke’s Drift, much less of the comprehensive defeat at Isandlwana. They went home changed men. Many would never recover from the apocalyptic scenes, the stench of rotting human flesh, the sight of the unstoppable ‘black wave of death’ careering down the hill or the blood-curdling fear of facing a painful, savage and bloody death again and again over hours and hours.

The formidable Zulus – the greatest warriors in all of Africa who towered over their red coat counterparts – lost thousands more men and just hours after a momentous victory at Isandlwana, would have their battle honour crushed at Rorke’s Drift. Their home and kingdom would be forever changed by the invaders in subsequent battles; invaders who had no real interest in Zululand other than to chalk up another conquest.

Zulu memorial Rorke's Drift-Ward

Modest and beautiful: a rare Zulu memorial to those warriors who fell at Rorke’s Drift

I would challenge even the most hardened soul not to have a lump in their throat by the end of the tour. The haunting recordings of Zulu songs and British marching bands accompany you as the open safari Land Rover rattles across the gravelly uneven ground to the different vantage points and key areas of the battle. To the spot where the first two posthumous Victoria Crosses in history were earned – the highest award for valour in the British Army to this day. To the ridge line where thousands of Zulu warriors lined up with their shields and spears stamping their feet in deafening unison, before moving as one onto the ill-fated British line of defence. To the missionary house under siege and ablaze, where one man ground his fingers down to the bone scraping through mud brick walls to carry his injured comrades to safety. The unnamed and last red coat left standing at Isandlwana who from his hiding place in the rocks picked off as many enemy as he could with his remaining bullets, then watched as his boyhood friends were hung from meat hooks, disembowelled and left tasting their own testicles. The feathered barefoot warriors who could outrun cavalrymen on their horses and charged unfalteringly into an unrelenting barrage of lead.

memorial Isandlwana-Ward

Painted cairns litter the Battlefield of Isandlwana – each representing the exact spot where soldiers fell and were buried

Isandlwana and Rorke’s Drift are tiny battlefields in the middle of the vast plains of what is now Kwazulu Natal, the peppering of painted white cairns, humble monuments of remembrance and a small museum the only signs left of the carnage of the 22nd January 1879. But they were momentous events in history: they played a key part in changing the face of South Africa as we know it today and the Zulu legacy. Isandlwana would be remembered as the greatest ever Zulu victory, and one of the worst defeats in British military history. The battle of Rorke’s Drift still boasts the highest number of Victoria Crosses awarded – eleven – in one single battle. After the carnage of the battle of Isandlwana, Britain would no longer send men under the age of 18 to war. But they were also battles that could and should have been avoided, invasions across territories that were not sanctioned by leaders or politicians on either side. For Britain, it was war waged when heavy losses were already being suffered on another front in Afghanistan. And it was a mission launched out of contempt and with a lack of cultural understanding of their enemy. The aftermath was a political cover up of the defeat at Isandlwana and a contrasting over-hyping to the press of Rorke’s Drift. Mistakes we continue to make more than a century later and lessons from which we must learn.

Buffalo river crossing point-Ward

Buffalo river, a raging torrent (at the time) in the path of the few surviving British on a desperate retreat from Isandlwana, which claimed dozens of lives

But the political and military lessons should never tarnish the undeniable and incredible courage of the British soldiers and Zulu warriors who took to battle that day in 1879 and the thousands of men who gave their lives for their countries and comrades without hesitation.

You come away from Fugitives’ Drift informed by the history lesson and intrigued by the political machinations of the day. But most of all you are moved and inspired by the ordinary Zulu and British men who marched to Isandlwana and Rorke’s Drift and displayed unparalleled courage, resilience and dignity.

(our trip was booked through AfricaAndBeyond.co.uk)

 

An Unspoilt Nature Paradise in KwaZulu Natal

IMG_5735

Rocktail Beach

The single-lane tarmac motorway runs almost exactly South to North, carving a straight line through small towns, villages and (very) isolated service stations with an incongruous bright red ‘Wimpy’ or ‘KFC’ sign protruding out of the bush. The ‘N2’ follows the coastline towards the Swaziland border and took us to our turn-off for the Maputaland Marine Reserve and our destination for four nights, Rocktail Beach Camp.

Off the main road, we were directed down a gravel road with surprisingly green and lush bush on one side and tall forestry blocks on the other. We had been instructed to park up at a place called ‘Coastal Cashews’ and wait for a 4-wheel drive to pick us up. A few kilometres down the track and a large brown sign outside a cashew plantation took us to our parking spot under an awning behind a barn and next to a row of tractors.

We emerged into the sticky heat from the luxury of our air-conditioned rental car and were soon met by Abi, one of the team from Rocktail Bay. Having hauled our luggage and us into the back of the open-topped safari truck, we set off further down the gravel road. The gravel gave way to yellow sand as we travelled deeper into the forest and towards the sea. After about half an hour, we pulled up to a small sign: we had arrived at Rocktail Beach Camp.

view rocktail

View from our treehouse

Natalie and her husband Willem welcomed us off the truck and led us up the stone steps into a small clearing with a bright blue swimming pool, a few sun loungers and a thatched open dining area that led into a bar populated with comfy sofas and glossy marine life coffee table books. They apologised profusely that our ‘room’ was the furthest away up in the treetops. It was rather secluded as it was the honeymoon suite and did we mind being upgraded? The ‘room’ was more of a tent-cum-house on stilts. The pathway through the woods led us up the hill through the woods delicately lit at regular intervals with forestry lamps, and eventually onto a deck that wrapped around a thatched house. The deck was level with the treetops, affording a breath-taking view across the forest and out to sea. The ‘room’ consisted of a living room, complete with tea and coffee making facilities and a complimentary decanter of sherry, a bedroom with a bed big enough for a family of five, and a shower room in between – also big enough for a family of five. The panorama across the ocean was uninterrupted across all three rooms, with a series of glass and mosquito net panels across the front. Standing in the shower while trying to spot dolphins jumping became a particularly entertaining pastime, but one which was not conducive to short ablutions – a requirement in a nature reserve suffering from a drought.

As is the African weather’s wont, the skies went from bright blue and sweltering sunshine, to torrential steamy downpours and back again in a matter of minutes. Whatever the weather, the beach – a 10-minute walk through the forest – was spectacular. Quite literally not a human being to be seen on it as far as the eye could see. The waves crashed up the fine yellow sand, disturbing the odd Red Duiker (a diminutive bush buck) that had strayed out of the treeline and sending the small Bambi-like figure scampering back over the dunes.

Our hosts could not do enough for us – insisting we have lunch on the beach on our second day. We expected a picnic basket and a couple of bottles of beer. We got a feast of cured meats, cheeses, pickles and homemade bread. With it came an overflowing basket of fresh fruit and a cooler box filled to the brim and topped with a surprise bottle of bubbles. The spread was carried onto the beach for us, laid out on a tablecloth, salt and pepper sellers, champagne glasses and all. We were then left to our own devices – finishing off a perfect and utterly undisturbed afternoon by body-surfing the incoming tide like teenagers – until the leftovers were spirited away again and we wandered back up to the camp on the forest track.

lunch

Lunch on ‘our’ beach

We could not visit the Maputaland Marine Reserve in the summer season without going out on a turtle drive. Between November and March each year, hundreds of turtles make their way into the bay and lay and bury their eggs on the beach. The numbers had dwindled but thanks to a wildlife conservation project, they are booming once more. We set off with our turtle guide at midnight, driving along the beach looking out for the tell-tale signs of turtles emerging from the waves. We passed a number of flipper tracks before stopping by what was the jewel in the crown – a rare Leatherback turtle – the largest species in the world. It had laid its eggs and was busy scuffing up sand with its enormous and powerful flippers. Our guide straddled the beast to measure it– a whopping 1m60 long and 1m20 wide. We did not stay long, leaving it in peace to complete the burial of its eggs and make its way back into the water. During our outing we also spotted the smaller and more common Loggerhead turtle and watched quietly in the darkness, swatting away thousands of tiny flies buzzing around our heads, while it laid egg after egg into the deep hole it had excavated. An unforgettable sight and one which I would recommend to anyone visiting the Reserve.

turtle

Measuring the huge Leatherback turtle

We did not get around to snorkelling on the nearby reef during this visit but that leaves us something to do next time we visit. Other guests were drawn to what we hear is exceptional scuba diving with a wreck to explore as well as the unpolluted reefs.

The area is a rare unspoilt and unpopulated tourist destination and huge work has gone into the preservation of its beauty and its flora and fauna. It seems perverse to encourage people to visit as it is precisely its seclusion and remoteness that is appealing. But if you are up for peace and quiet, a privileged insight into nature going about its business undisturbed, and do not balk at the prospect of being cut off from the outside world, then this is the place for you. Natalie and Willem and their team go to every length to make your stay as perfect as possible, while giving you the space to feel like you are all alone in your own personal paradise.

beach

Our own personal paradise

The idyllic setting and relaxing stay made it all the more difficult to readjust to everyday life back in grey and wintry UK. Three days later I am still in denial, reluctant to discard my flip flops. But the onset of frostbite and odd looks from Christmas shoppers are a price worth paying for the pleasure of clinging on to the utter bliss of Rocktail Beach Camp for just a few more days.

(our holiday and itinerary was booked through AfricaAndBeyond)

 

A Hidden Gem in Residential Cape Town

cape town by night

A Christmassy Cape Town by night

Tucked away up a quiet leafy residential street in Cape Town, we nearly drove past Four Rosmead boutique hotel assuming it was one of the many white-washed gated private properties in the affluent hilly district nestled under Table Mountain.

Its unassuming but polished exterior is reflected in the discreet and immaculate interior of the property and its warm and welcoming staff. We were greeted with the warmth of familiar guests returning to their country retreat. We were led through the comfortable sitting room complete with fireplace and complimentary evening drinks tray and out onto a balcony overlooking a walled garden. A handful of rattan loungers were arranged over a gravel suntrap near a small swimming pool, opposite which was our room. Four Rosmead has generously upgraded us to a suite – a huge living room with kitchenette, bedroom and vast bathroom – with its own private sunbathing area and outdoor shower. There were building works going on in adjacent properties but they were confined to a few hours during the day, during which time we were exploring Cape Town and the surrounding area.

rosmead

A welcome cup of tea in the haven of Four Rosemead

Breakfast was plentiful and freshly prepared to order. Dinner was available on request, although we chose to eat out on the V&A Waterfront one night and had the inevitable ‘braai’ with family and friends the other.

Four Rosmead is a small and cosy setting in the hustle and bustle of Cape Town. The owners and staff clearly take great pride in delivering a personal and exclusive service while making guests feel at home in the cosy surroundings. The attention to detail, beautiful setting and quality of the service are what makes Four Rosmead a hidden gem: easily accessible to the shops and sights of Cape Town, but secluded from the hustle and bustle after a busy day exploring the South African city.

prothea

A South African protea – the national flower

An African Thunderstorm

African thunderstorm Rorkes Drift

There’s nothing quite like an African thunderstorm.
In the UK we are treated to grey skies and clouds that can’t seem to make up their mind if they’re just going to float above us indefinitely, push off to Belgium or be decisive enough to whip up something spectacular. More often than not, they decide to hang there and spit on us for days at a time – the kind of rain dubbed ‘miggie-pis’ (pronounced mihhy piss) by my Zimbabwean husband – then sit around some more before the next half-hearted offering.
In Africa there’s no pussy-footing around. The flamboyant display arrives unannounced in between two stretches of scorching sunshine and bright blue sky. It makes a brutal cacophonic entrance then deafens, blinds and blows you away. The only warning is a subtle smell of damp in the air and a quietening of birdsong. If your nostrils and ears are tuned, you may have just enough time to find shelter and move the ‘braai’ under cover.

African thunderstorm threatensAfter a short spectacle, the billowing clouds, torrential rain and deep drum rolls of thunder are gone. Blue sky and bright sunshine return. The ground sizzles and lets off steam, grateful to have had its thirst quenched even for a minute. The birds re-emerge from their hiding places and resume their chattering. The braai is nonchalantly rolled back out into the open and smoke rises off the coals. As the sun turns a deep shade of orange there is no more than a wisp of cloud high in the sky. The silhouette of a lone tree appears on the horizon as steaks the size of suitcases are laid across the grill. The only remnant of nature’s onslaught is the perfume of wet jacaranda tree flowers competing with the cooking marinade.

After the storm