“The City was also overwhelmingly in favour of scrapping the pound and adopting the euro. I think most people would now agree that would have been a grave mistake,” he added. “Just as the City has flourished outside the eurozone, I am confident it will flourish even more outside the EU.”
So far the City has more or less accepted that it will lose its treasured passport to access the EU. European lawmakers have made it clear they will relentlessly pursue London’s euro clearing business until it is under the European Central Bank’s watch, and many firms have already made the decision that they will be moving jobs to continental Europe.
Just yesterday Deutsche Bank warned that up to 4,000 jobs – almost half of its UK workforce – could be moved to Frankfurt and elsewhere in the EU. That’s despite repeatedly reaffirming its confidence in the UK as recently as March this year when it took out a 25-year lease on new premises.
Bloomberg estimates that some 12,500 banking jobs are currently at risk of being relocated outside of London, with Dublin, Frankfurt and Paris touted as possible destinations.
- Speaking at an event in the City last night the former UK secretary for business, innovation and skills said that Brexit will be a body blow for London’s financial services industry;
- Meanwhile prominent Leave supporter and former chancellor Lord Nigel Lawson countered that the City has flourished outside the eurozone and will continue to do so outside of the EU;
- Cable also cast doubt on both Prime Minister Theresa May’s ability to strike bilateral trade deals with non-EU countries and on the hope of many that she will oversee a bonfire of EU financial regulation.
Meanwhile Prime Minister Theresa May’s commitment to reducing net immigration from 300,000 per year to 100,000 will undoubtedly mean the City will lose some staff.
“If you are a small fintech startup in London you will find your future for hiring EU staff will be determined by a junior staff member at the Home Office,” said Cable, who added that May’s promise of bilateral trade deals with the rest of the world is ‘pure fantasy’.
"The complaint in the City is always 'why do we have to implement this directive?'...well now we have the opportunity to convert some of that into a format that works"
“Let’s get real. Even the Trump administration has made it clear that dealing with a country of six million people is less appealing than the EU. It comes down to the power of economics,” he added.
But in response to Lawson’s claim that the first step after Brexit is repealing the huge corpus of undesirable EU financial regulation, Cable said the prospect of May deregulating – particularly rules surrounding bankers’ bonuses – is incredibly unlikely considering her actions so far as prime minister. “She wants more, tighter control,” he added.
Meanwhile Chair of the Office of Tax Simplification and former CEO of the British Bankers’ Association Angela Knight said that the financial services industry needs to decide what it wants that is financially doable and politically sellable, and make its demands clear to the relevant negotiating authority.
“The complaint in the City is always ‘why do we have to implement this directive?’ or ‘why do we even have these rules?’” she said. “Well now we have the opportunity to convert some of that into a format that works better, and that to my mind is an opportunity rather than something to be feared.”
English law and the certainty it brings was also repeatedly pitted as a unique selling point for the City of London. Other jurisdictions around the world including major financial centres pass on their own legislation and import English law instead, and that is something to be proud of, added Knight.
“A typical financial services position is to get the consultation documents, argue on the principle, argue on the details, argue back and forth until they argue themselves to a standstill then reach an agreement,” she said. “Do you honestly think we’ve got time for that?”
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