The City would still f lourish if we lef t EU, says Barclays chief

THE City of London would continue to thrive if Britain votes to leave the EU, a senior banker said yesterday.

Whatever the result of this year’s in-out referendum, the capital would still be the largest financial centre in Europe in ten years’ time, Mark Astaire, vice-chairman of the investment banking division at Barclays, told MPs.

His comments are at odds with apocalyptic claims by some in the financial sector that a vote for Brexit could push banks away from London. The ratings agency Standard & Poor’s warned last year it would lead to financiers locating themselves in Dublin or Paris instead.

Appearing before the Treasury select committee, Mr Astaire said: ‘The City of London is a great success story, despite the challenges it’s had. It’s one of our leading industries and its clearly the European leader.

‘London has thrived within the [European] Union. I have to say I think it will continue to thrive outside the Union, though I think there will inevitably be some challenges in the event that Britain was to leave.

‘Do I think that if the UK was to leave the Union, London won’t be the leading financial centre in Europe in ten years’ time? I would have to say no.’ He

‘Should be an opportunity’

The City of London ... has thrived within the Union. I have to say I think it will continue to thrive outside Mark Astaire of Barclays addresses the Treasury

select committee

conceded there was a risk ‘at the margin’ that some financial institutions would relocate to cities still in the EU.

But he said: ‘I don’t think London’s going to collapse whatever happens – far from it. There are lots of other good reasons why London is going to continue to be successful.’

Mr Astaire said that while he believed most businessmen wanted to stay in Europe, there are many who do not.

‘Brexit is seen by many people as being perhaps in the long-term interests of the British economy, but as being an uncertainty they would rather not have to deal with as the leader of a business,’ he said. ‘People are very cautious about the uncertainty of a Brexit even if they think it might fundamentally be the right thing to do.’

He suggested that if the UK votes to leave, he would prefer a clean break rather than a ‘Euro-lite’ relationship such as that in place with Switzerland, which has access to the single market as part of the European Economic Area but has to abide by a slew of Brussels rules.

‘If there’s a Brexit, it should be an opportunity,’ said Mr Astaire. ‘To then have a Euro-lite relationship may prove to be a missed opportunity.’

He also criticised EU rules that he said were harming the financial sector, such as those limiting bankers’ bonuses. He said this made it harder to attract the best talent from the US.

Mr Astaire told MPs: ‘One of the big challenges for European banks is being able to compete on a level playing field with what are largely the American banks.’ He said British banks were the only European institutions operating in the ‘premier league’, adding: ‘Our ability to do so is pretty important.’

However, James Chew, group head of regulatory policy and strategy at HSBC, told the committee he believed the City would be harmed by Brexit.

‘London always had a load of intrinsic advantages – location, language, law, liquidity,’ he said.

‘Having access to the single market has undoubtedly bolstered that and enhanced the status of London as a hub.

‘How London’s position would sit if there were a vote to exit; I think that would depend very much on the nature of the exit.

‘The position under a soft exit, where we’re EEA members, would be very different to the position under a hard exit, and would depend on the institutional arrangements put in place between the EU and the UK.’

Mr Chew added that a vote to leave the EU would lead to ‘a very big disruption’ that would harm the financial sector.

Robert Oxley, a spokesman for the Vote Leave campaign, said last night: ‘Despite the doommongering from the in-at-allcosts brigade, it’s clear the City would flourish outside of the EU. London is a success often in spite of the EU, not because of it. If we vote Leave, we can build on the strength of our financial services, rather than handing more control of them to Brussels.’

Those campaigning to stay in the EU have long been accused of scaremongering about the Brexit threat to the City.

Lucy Thomas, from Britain Stronger in Europe, last year quoted Goldman Sachs vicechairman Michael Sherwood as saying: ‘In all likelihood we would transfer a substantial part of our European business from London to a Eurozone location.’

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