AUTHOR: David Thorpe
Central government’s number one priority around Brexit right now must be to provide clarity for the City of London on the status of EU workers living here, and those wishing to live here in future, according to the body representing the financial centre.
Speaking at the Investment Association conference in London yesterday (28 March), Catherine McGuiness, chair of the policy and resources committee at the City of London Corporation, said she is optimistic the UK will remain the leader in financial services in Europe after Brexit, with the people from around the world wishing to live here.
But she said uncertainty around the future status of EU workers living in the UK remains a problem as it was not dealt with in the transition agreement signed early this month.
She said it is “vital” the financial services industry gets clarity on this issue.
Ms McGuiness said “I am an optimist that it will be possible to include financial services in the final deal. The City arranges a trillion a year of loans a year, half the debt and equity issued in the EU happens through the UK, disruption would mean people lose money.
“There would be some movement of jobs and industry if an agreement was not reached, but I think it is countries outside of Europe that would win if the City of London shrinks.”
The City of London Corporation provides local government and policing services for the ‘Square Mile’.
Ms McGuiness said the relationship between the UK government and the City of London corporation is an example of a “mutual recognition agreement of the sort that the UK is seeking.”
The fund manager Mark Barnett, who runs the £9.2bn Invesco Perpetual High Income fund, said the stock market is being too negative on Brexit.
The fund manager said “the current level of anxiety about the outlook for the UK economy is not justified”.
He has backed this view by investing in companies that, collectively, derive the majority of their revenue from within the UK as he feels the economy will perform better than the market expects and the domestically focused stocks will benefit.
The City of London is being too “pessimistic” about the outlook for the UK financial services sector, according to Kwasi Kwarteng, a conservative MP who is parliamentary private secretary (PPS) to Philip Hammond, the chancellor.
Speaking at the Investment Association conference, Mr Kwarteng said: “We have the transition deal.
“I remember when the debate was about whether the UK should join the single currency. We were told the UK would lose its place as the leader in financial services. And yet it didn’t happen.”
Chris Leslie, the Labour MP for Nottingham East and a member trade select committee, said the only reason the government has hit the deadlines it set for the Brexit negotiations is because it “capitulated” on key points.
Mr Leslie played down the chances of the government falling as a result of losing a vote on Brexit in parliament.