LONDON: The British government’s new blueprint for Brexit on Thursday drew a firm thumbs-down from the City, which warned it would damage both the all-important finance sector and the wider economy, but industry appeared happier, reports AFP.
The government, partly to avoid the return of a “hard border” between the Republic of Ireland and British-ruled Northern Ireland, has been at pains to map out a future customs plan to govern post-Brexit trade in goods with the European Union.But its new “white paper” gave little detail about the future of services, which account for 80 percent of the UK economy, including 2.2 million people employed in Britain’s world-class financial sector.
“Today’s Brexit white paper is a real blow for the UK’s financial and related professional services sector,” said Catherine McGuinness, policy chairman of the City of London Corporation, which administers the capital’s finance-heavy Square Mile district.
“With looser trade ties to Europe, the financial and related professional services sector will be less able to create jobs, generate tax and support growth across the wider economy,” she said.
“It’s that simple.”
Around £1.4 trillion ($1.85 trillion, 1.58 trillion euros) of assets are managed in Britain for European clients, the white paper noted, and the City hosts most of the EU’s trading for banks and insurance companies.
The paper conceded that City firms will lose their “passporting” rights to operate freely across the EU, once Britain exits the bloc’s single market after Brexit in March 2019.But it also said that because of the significance of cross-Channel links, “equivalence” was also insufficient.
That refers to special bilateral arrangements already used by financial firms from Wall Street, Japan and China, whereby they agree to meet EU rules to keep access to the common market.