The Government is facing increased pressure to prioritise the country’s financial services sector in any trade deals that follow the UK departure from the EU.
Concerns are growing that this cornerstone of the country’s service industry, concentrated in the City and Canary Wharf, will take a hit when the UK loses so-called “passporting” rights to do business with the EU.
Already a number of top City banks have indicated they are preparing to move sizeable chunks of their workforce abroad to maintain the links. This will have a knock-on effect on a range of professional services that have grown up around the finance sector.
Fears of the erosion of this lucrative sector has prompted lobby group TheCityUK to seek “enhanced attention” for it says is a primary driver for UK economic growth, employment and competitiveness.
“If greater market access can be secured for UK-based financial and related professional services, there will be positive multiplier effects for the other UK sectors that they serve, with added benefits for the UK economy as a whole,” the Future UK Trade and Investment Policy report said
The report highlighted that the UK is the world’s largest exporter of financial services, with exports worth £77.5 billion in 2015, employing more than 2.2million people and accounting for about 11% of UK tax receipts.
“In TheCityUK’s view, no UK trade or investment agreement should be concluded without these interests being addressed fully and satisfactorily.”
The lobby group, along with most senior bankers, recognise the attempt to maintain passporting rights failed when Prime Minister Theresa May said in a recent speech that there will be a complete severing of ties with the EU institutions.
However TheCityUK still maintains it is possible to secure a deal that is broadly similar and retains access both ways. EU officials have expressed concern that the 27 countries also need easy access to the capital offered by City institutions.
This call for a bespoke deal is echoed in another report by law firm Hogan Lovells and the International Regulatory Strategy Group (IRSG) which says it would maintain coherence across the financial markets as well as improving co-operating and removing barriers.