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With so much tax take at risk, no wonder ministers are cosying up to the City

Chancellor Philip Hammond knows that if the financial services industry flee these shores we are in big trouble

It’s fair to say that bankers aren’t going to win any popularity contests any time soon. Those surveys that are periodically conducted to gauge the trust and esteem in which various professions are held tend to rate them at or near the bottom. Alongside MPs and, er, journalists.

But they do pay an awful lot of tax. The financial services sector generally, which also includes insurers (also not very popular, and with good reason) and asset managers, is set to contribute £71bn to the UK exchequer this year.

The figure was calculated by the accountancy firm PricewaterhouseCoopers, which has issued a report on the industry's payments to the exchequer for the past nine years. The number includes the levies financial firms pay, such as corporation tax, irrecoverable VAT, the banking levy, as well as the taxes they collect, such as their employees' income tax and national insurance contributions.

This year’s tally represents 11 per cent of the UK’s total tax take. It explains why Chancellor Philip Hammond and Brexit Secretary David Davis were so keen to cosy up to the industry’s bigwigs at their recent summit meeting. They know that should the industry flee these shores they’re in big trouble. And so are we.

Now, I’ve been a vocal critic of the banking industry, and of the “most favoured nation” status it has been accorded by successive governments. Running UK plc at the behest of the City has done the country no favours, as the banking crisis proved. Britain would have far better off pursuing a more diverse economy, and regulating the City with a firmer hand.

But we are where we are, and given the budget deficit the country is running, and will run for several years to come, it’s not as if we can afford to lose that revenue stream.

Which brings us to Brexit. The Leave campaign’s biggest lie was that the savings made by removing Britain's requirement to contribute to the EU budget would net £350m a week for the NHS.

Trouble is, those contributions secure free access to the world’s biggest single market and the passporting arrangements that allow financial services companies to sell their services across Europe. Without them, they would have to move functions on to the continent, and bankers with them. That isn't an industry threat. It's a hard fact. Brexiteers aren't terribly fond of those but they have a nasty habit of biting you somewhere painful when they're ignored.

It's worth noting that, according to PwC’s study, for every £1 paid by financial institutions they collect £6, includes their employees' taxes that I mentioned. Were those employees to leave, their tax would follow them. Which is why the Government has good reason to be worried and why people are talking seriously about transitional trading arrangements, and a softer Brexit in the hopes of keeping them in London.

It isn’t so much the Liberal Democrats stunning victory in Richmond Park that is motivating this. It’s the reality Birtain faces, which I’m told the banking chiefs quietly reinforced at the meeting.

For once they’re trying not to sound shrill or to make threats. There are enough of them coming from hardline Brexiteers who seem to enjoy shaking their fists and threatening violence when they’re not sulking about the lack of any plans to build a massive wall along the south coast of England. Oh, hang on, that’s their Trumpkin pals in the US.

The banking industry has too often played that game in the past (sans the violence), and, surprise, surprise, people got cross with it and took the opportunity to vent their unhappiness in the EU referendum. If there’s anything left of the industry at the end of this sorry process, its remaining leaders might care to reflect on that.

There might be something left if the Government does pursue a softer sort of Brexit, one that keeps our access to the single market. We’d still have shot ourselves in the foot in that scenario. But we wouldn’t have followed it up by shooting ourself in the guts.

Such a Brexit would, of course, require us to continue paying into the EU budget (as Mr Davis has intimated that we might). But here’s the thing: UK plc has already lost far more than the £350m a week that Leave alleged would be saved for the NHS through the Brexit induced currency devaluation and a calamitous fall in business investment.

If £350m a week – £17bn annually – is what it takes to protect £71bn (and that’s just what financial services contributes remember) it will be money well spent. Perhaps ministers, at least the sensible ones, are finally waking up to that fact. We can but hope.