London financial services job losses after Brexit may be lower than previously thought, according to a top City of London official.
Jeremy Browne, the City of London Corporation’s envoy to the EU, said financial services firms’ plans to move jobs out of the UK and into the EU were becoming less drastic than initially thought.
“It may end up for quite a lot of them being a bit less dramatic than it might appear,” Browne said, according to Reuters.
Large banks and insurers are not saying they will “abandon London” after Brexit, he said.
Estimates of potential job losses have varied widely. With a much-cited October 2016 report by consultants Oliver Wyman estimating as many as 75,000 job losses in the worst-case scenario, with no trade deal between the UK and the EU.
However, since then estimates of direct job losses have fallen from most observers, with the Bank of England working on the assumption of 10,000 “day one” job losses after March 2019, dependent on some form of trade deal or transition arrangement.
Browne, who will tour EU nations over the next five months as part of the City’s lobbying efforts, renewed the urgent call for a transition arrangement to be agreed, so that firms can plan operations after March 2019.
Business leaders and officials from bodies from the Bank of England to the Confederation of British Industry have been united in their calls for a transition deal to be agreed as soon as possible, with the Bank warning any deal after March would have diminishing usefulness for firms, who generally plan at least a year ahead.
“Speed is of the essence,” Browne said.
Once a transition deal is agreed talks will move on to the more important longer-term trade deal. The City of London Corporation along with other lobby groups like TheCityUK advocate a system of mutual regulatory recognition, in which the UK and the EU acknowledge the soundness of the respective regulatory systems.
Mutual recognition is seen as far preferable by many in the City to the current arrangement open to non-EU countries, regulatory equivalence, in which third countries must be deemed to have equivalent standards by the EU alone, meaning non-EU firms are effectively bound by EU rules.
“People are quite hard line about not having equivalence as the final state,” Browne said.
Regulatory divergence would then be managed through a body. This would help to assess and guide movements in different directions by the two jurisdictions. However, that position, set out in a blueprint last year, has so far received little public support from EU politicians.