LONDON (Reuters) – Britain’s huge financial services industry will lose more jobs to Europe in the coming years because of Brexit, the City of London’s policy chief told Reuters, warning people not to be fooled by the small number of jobs relocating to the continent let far.
FILE PHOTO: Catherine McGuinness, Chair of the City of London Corporation’s Policy and Resources Committee, poses for a photograph in London, Britain January 17, 2018. REUTERS/Hannah McKay
The City of London, home to global FX, bond and fund management businesses and more banks than any other financial center, is facing a shift as companies decide whether to relocate jobs to continental Europe to continue serving customers there after the UK left the country is to leave the EU in two weeks.
Catherine McGuinness, political director for the financial district’s municipal body, warned that the country’s largest export sector and largest source of corporate taxation has no “God-given right” to global financial supremacy.
“The announced job changes are quite small at the moment. We would expect these to increase,” McGuinness said in an interview in a room next to the local government’s seat of power in the medieval Guildhall. “It’s not the end of the story. This is a high risk moment for the city.”
Ever since Britain voted to leave the European Union three years ago, London’s financial services industry has been rocked by the prospect of ending four decades of regulatory integration and losing access to the bloc in one fell swoop later this year.
McGuinness said business leaders were frustrated by more than three years of uncertainty and concern about some of the political dynamics behind the no-deal exit.
“We need the government to stop playing around and ordering our long-term future on the basis that will enable us to build a harmonious relationship with our EU partners in the future,” she said.
Britain and the EU are meeting at a summit in Brussels on Thursday to agree a divorce deal, otherwise Britain faces an extension or a disorderly no-deal exit.
“A disorderly Brexit would be a bad thing and I don’t think anyone would be enthusiastic about an extension. We don’t want cans being thrown down the street,” McGuinness said.
But since global banks are loyal to no one, she called on the government to help the city continue recruiting international talent, build decent housing and transportation, and keep banks competitive after the United States cut taxes.
Asked whether she would prefer Britain to leave the EU with no deal or a socialist government led by opposition leader Jeremy Corbyn, McGuinness said it was a difficult question to answer.
“A destructive exit would be a very bad thing,” she said. “A government of any kind that only takes care of the entire needs of the entire economy would be a better solution.”
Reporting by Huw Jones and Andrew MacAskill, editing by David Evans
