Thursday 18 January 2018

Revealed: Banks’ secret Brexit fallback dossier

Tim Wallace

Britain’s biggest banks have drawn up a secret list of demands for politicians if the UK chooses to leave the European Union today, calling for a bonfire of red tape, open borders and a publicity drive to bolster the UK’s status as a financial centre outside the EU.

Business group TheCityUK – which opposes a Brexit – has warned that leaving would damage financial services, drive jobs to the Continent, and harm the economy.

But confidential documents, which have been seen by The Daily Telegraph, show the group has a plan to mitigate that damage, and even believes it would be possible to publicise a “relatively better long-term economic outlook for the UK” which would “promote financial stability” outside the EU.

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Lenders financing London property are seeking higher interest rates as the market there slows
Lenders financing London property are seeking higher interest rates as the market there slows

The plan sets out “key policy asks” which the group, made up of banks including Citigroup and Lloyds, law firms and insurers, will put to the Government if voters choose Brexit.

Initial steps involve exiting smoothly with a “transitional period” to ensure “nothing changes overnight”.

Finance firms want to ensure the UK retains as much of its access to the single market as possible and adopts a mechanism similar to the passporting regime, which allows firms in the UK to operate across the EU.

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Beyond that, an independent UK needs to work hard to “maintain London’s international competitiveness” as “opening up markets outside of the EU is crucial,” the documents say.

That means promoting a level playing field in global financial regulation, throwing the UK fully into a leading role in the G20, Financial Stability Board, Basel Committee, World Bank and International Monetary Fund. It also means slashing red tape.

Bright start for the UK – but companies are cutting staff. Photo: Bloomberg
Bright start for the UK – but companies are cutting staff. Photo: Bloomberg

The proposals suggest “rethinking the UK’s regulatory approach … to support jobs, growth and competitiveness”. Banks and finance firms are keen to ensure the finance sector is not cut off from the international jobs market. That means “pressing the case for continued access to skilled talent from the EU and the rest of the world in order to boost the UK’s competitiveness”, and suggests the City will be lobbying for accommodating immigration rules.

In combination with a trade policy which replicates free trade with the EU and adds on new agreements with “key trade partners” in the rest of the world, it should be possible to have a strong economy in future, the group hopes.

By contrast, if voters decide to remain, TheCityUK wants British policymakers to engage more vigorously with Brussels. It also proposes “better engagement of the UK parliament, with full scrutiny of EU proposals”.

In addition it would like to see “more UK officials in EU institutions; this should be seen as an important part in a senior civil servant’s career”.

A spokesman from TheCityUK said: “This is a draft internal document to ensure preparedness for what is a significant vote – an expected and prudent business practice. It should be noted that 84pc of our members have said that they want to remain part of the European Union – 95pc have stated that continued access to the single market is vital for their competitiveness.”

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