28 June 2016

Mark Boleat: Brexit was a blow but the City will still be the world’s financial hub

It is stating the obvious to say that last week’s referendum didn’t go the way many City businesses expected or hoped. But the British people have spoken. Our priority must now be to ensure London continues to thrive as a financial centre, and that the UK’s wider financial services industry continues to create jobs and finance growth across the country. [...]

Financial services are a vital pillar in the UK’s economy, contributing more than £65 billion in taxes to the Treasury every year — 11 per cent of total government receipts. More importantly, financial and professional services support more than 2.1 million jobs — 7.2 per cent of all UK workers. Many of these jobs are European-focused, as London is the pre-eminent financial and professional services hub in Europe. This makes these jobs particularly vulnerable to any loss of access to the European Single Market of 500 million people, the largest in the world. It is vital therefore that the Government seeks to keep this access at the centre of its negotiations. 

One thing is certain: there will be no mass exodus of banks and financial institutions from the Square Mile. They will not rush to take decisions and they will seek to do any restructuring in a way that minimises disruption. And it is certain that banks will continue to maintain a major presence in our city.

While Article 50 of the Lisbon Treaty, the untried mechanism governing a country’s exit from the EU, may not be triggered for several months, there will, of course, be a period of uncertainty throughout the UK, and throughout the world. The Government must do everything in its power to limit this uncertainty, and act swiftly to reassure businesses and ensure continued investment in our country. The longer the uncertainty persists the greater the risk of job losses that will damage the wider economy.

[...] While some industries will be adversely affected by this decision to leave the EU, there is no reason why London can’t maintain its position as a world leader in financial technology, foreign exchange and professional services.  [...]

There is a clear view in the City of London that our labour market must be kept flexible. European nations have provided much of the talent we need to succeed and this level of support to the British economy must continue. Whether these people come from the EU, or through expanded ties with Commonwealth countries, is not a matter of importance. What is vital is that the UK maintains itself as an outward- looking country and, importantly, continues to attract the very best talent. [...]

One option, put forward by the London Chamber of Commerce and which I find particularly interesting, is the proposal for a “London visa” for those looking to live and work in our city. This, accompanied by continued “passporting” rights for financial services, would certainly minimise any negative effects precipitated by the referendum result. 

For our part, the City of London Corporation will continue to engage with both our Government and EU policy makers to promote London as Europe’s international financial and business centre. We have the talent and infrastructure that has made London the world’s leading financial hub: these key ingredients for prolonged success remain in place. 

Full article on The Evening Standard

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