It’s Code Red for the City as it issues warning over EU
THE City of London Corporation is poised to issue a ‘red’ warning report on the impact of Brexit over fears that a split from the EU will damage the capital’s appeal to financial services firms.
The report from the Corporation, one of the City’s most influential groups, has upgraded the risk rating for the Square Mile from ‘amber’. It cited the increased probability that ‘a post-Brexit trade deal between the UK and EU is unlikely to replicate the level of access firms have within the Single Market’.
The paper, seen by The Mail on Sunday, will be presented at a corporation meeting next week. The report warns that a hit to the City would have a ‘major economic impact on the UK [and] diminish the attractiveness of London and the UK as a place to do business’.
The Corporation estimates the financial services sector – dominated by the Square Mile and which employs 1.1million people across the UK – contributed £72.1billion in taxes last year. The Bank of England has estimated around 10,000 City jobs could leave London ahead of the UK’s first day outside of the EU. It has said up to 75,000 jobs could ultimately disappear.
The City report emerges after Prime Minister Theresa May last week hosted a meeting of City leaders, including bosses of Goldman Sachs and Barclays, to reassure them on the Government’s approach to Brexit.
One City source said there are some encouraging noises from the Government, but added that time is running out for Ministers to limit Brexit damage.
City groups are demanding a paper setting out the Government’s position on financial services ahead of Brexit, as has been done in other areas such as the customs union. The City of London Corporation said last week that it was ‘baffling’ this had not been published.
Nicky Morgan, chair of Parliament’s Treasury Select Committee, told the MoS: ‘The Government should get on with publishing its overdue position paper on the future of financial services after Brexit to provide some much-needed clarity.’