We won’t be silenced over Brexit threat to economy, say City chiefs
CITY chiefs today refused to be silenced over Brexit as they warned of the dangers of a cross-border financial services “breakdown” if Britain crashes out of the EU without a trade deal.
Stephen Jones, chief executive of UK Finance, which represents about 300 firms in the Square Mile and other cities, warned that “time is running out” for the UK and the EU to strike an agreement to limit disruption for companies and millions of customers.
He spoke out despite an intervention by Health Secretary Jeremy Hunt over the weekend in which he criticised Airbus bosses after they raised concerns over the lack of clarity from the Government on Brexit.
With a stand-off between London and Brussels on a range of Brexit issues, Mr Jones told the Standard: “Both sides must put aside the politics and agree to address cliff-edge issues now, to avoid the risk of a serious breakdown in crossborder financial services in March 2019 in the event of no deal. Time is running out to reach an agreement that will minimise disruption to firms and their customers in both the EU and UK.
“We believe that a no-deal scenario must be avoided and efforts focused on securing an ambitious deal on future cross-border financial services trade, to the benefit of customers on both sides of the Channel.”
A report by the consultancy Oliver Wyman estimates that a “hard Brexit” in which UK-based banks no longer have privileged access to the EU could result in the loss of 75,000 jobs and up to £10 billion in annual tax revenue for the Treasury.
The head of the International Monetary Fund today called on the EU to prepare for an influx of financial firms after Brexit. Predicting a significant relocation to the Continent and Ireland, Christine Lagarde stressed the need to enhance the EU’s regulatory and supervisory capacity.
Speaking in Dublin, IMF managing director Ms Lagarde said: “The euro area needs truly integrated financial and capital markets that allow companies to raise financing across borders more easily and support investment.
“In the near term, it is critical to ensure that regulatory and supervisory capacities are prepared for the influx of financial firms that will move to continental Europe — and Ireland — as a result of Brexit.”
Mr Hunt and International Trade Secretary Liam Fox hit back yesterday after business chiefs questioned the Government’s handling of Brexit talks. The Health Secretary accused them of making “completely inappropriate” threats and Dr Fox warned that taking “no deal” off the table during negotiations would weaken the UK’s bargaining position.
Airbus, Siemens and BMW have raised concerns about the talks and urged ministers to provide greater clarity.