The Courier & Advertiser (Fife Edition)
Finance firms preparing to leave City
Financial firms will pull the trigger on “irreversible” Brexit job relocations in the new year unless a transition deal is agreed imminently, a City lobby group has warned.
TheCityUK said the value of a transitional deal is “disappearing by the day”, as political and legal uncertainty dogs the Square Mile and big banks shift staff from London to the EU.
The group’s chief executive, Miles Celic, said: “EU and UK negotiators cannot delay discussing a transitional deal any longer if they want it to hold any real value.
“Firms are beyond the planning stage now. If they haven’t done so already, most will be ready to press go on their contingency plans in the new year.
“They can still take their foot off the accelerator if a transitional deal is agreed, but without progress soon, it may be too late. Once businesses start moving, there is no reverse gear. It is simply not efficient or economically viable to move operations twice.”
TheCityUK argues that, to avoid this scenario, an agreement must be reached by the first quarter of 2018 “at the latest”.
The warning comes after a steady stream of banks – such as Citigroup, Morgan Stanley, Daiwa, Sumitomo Mitsui Financial Group and Nomura – have already announced that they are relocating operations and staff from Britain to the EU in the wake of Brexit.
The lobby group believes that 75,000 jobs and £8-£10 billion in annual tax revenues are at risk if the UK crashes out in 2019 without a deal and has to fall back on World Trade Organisation rules.
British businesses have also pressed the Government to agree a transition period.
Mr Celic claimed the failure to secure a transitional deal isn’t “just about business leaving the UK”.
“It is about the very high risk of jobs, capital and inward investment leaving Europe entirely. The resulting fragmented markets will be of benefit to no one, with costs likely to increase for customers right across the continent,” he said.
Some experts believe that rival global financial centres such as New York and Singapore stand to gain the most from Brexit as London’s status diminishes.