The only “logical” answer to Brexit: Declare London a city state
I believe any rational assessment of the situation should lead to a vote to remain in the EU.
There is almost universal consensus among economists and the major global economic institutions that a Brexit will result in an economic hit to the country. There is a small possibility that it might destabilise global financial markets. The possible upside for the Brexiteers is limited (we can opt out of the European Court of Human Rights and limit refugee intake, but we will still have to have open borders to the EU).
However, it is equally clear that the argument might be swayed on the day by a more emotive appeal to identity, sovereignty and independence, irrespective of the economic fallout. As a patriot, I would therefore like to propose an alternative solution in case the country votes to leave that perhaps can bridge the gap between the two camps satisfactorily.
I would like to propose that London becomes an independent crown dependency.
Jewel in the crown – a city state?
"Londinium" would remain subject to the crown but become an independent city state, rather like Singapore.
London accounts for a hefty 22 per cent of the UK’s gross value added, up from 19 per cent two decades ago – even after the financial crisis. One academic study suggests it hasn’t been that important to the UK economy for a century.
Read more: Why the City of London will be better off if we leave the EU
Apart from the undoubted dynamism of the City, this also reflects much lower public sector reliance than many other regions. London’s gross value added (GVA) per worker is 40 per cent above the UK’s average – justifying the disproportionately higher wages and tax-take from London.
Broadening the new "Londinium" to include the South East and East England regions together would give the new city state a hefty 45 per cent of UK’s GVA.
The new "Londinium" could introduce a specie-based currency
To support the rest of the UK, Londinium would undertake to pay part of its tax take as levy to the rest of the United Kingdom, while remaining responsible for its own infrastructure and services.
This solution would effectively create a dual system. The rest of the UK can negotiate separately with the world trade organisation, impose immigration limits even on EU workers and instantly reduce its Muslim population by 35 per cent (myself included).
Meanwhile, Londinium with 20 per cent of its population made up of ethnic minorities, would remain (as it was in Roman times) a dynamic multicultural city and continue to thrive economically.
Singapore-upon-Thames
Londinium could be set up rather like Singapore as a free trade zone (FTZ). This negates having to reach agreements with the WTO or the EU. Its main revenue generation comes from financial services, which makes it pro-cyclical with financial upswings. It relies on its other strengths – electronics and chemicals, for instance – to offset the downswings.
To attract and retain talent, Londinium would be open to migration, operate a flat rate tax of 25 per cent on all income above £100,000 and abolish the regressive VAT. A property tax of 1.5 per cent – the same as in many US cities – would be levied on any property valued at more than £4m.
Londinium would pass on five per cent of its tax take to the UK government as levy to help their economy, and spend a further five per cent on providing assistance in housing and other services to vital public sector workers – including passing on the revenues from the property tax to help poorer Londoners.
To get round the problem of lacking the financial backing of the Bank of England, Londinium would abandon fiat currency altogether and adopt the gold denarius. This would lock in the internal value of the new currency, and mean it is backed by reserves, minimising the risk of default via inflation.
The third way
This solution meets the criteria of both camps in the Brexit debate.
The UK can close its borders, tighten its sovereignty and protect its identity, while the economic engine of the old country, Londinium, can govern itself through direct democracy, be open for business to the rest of the world and continue to thrive while supporting the rest of the UK.
Vote Londinium!