UK financial firms could up sticks over Brexit, warn peers
Financial services firms could desert the UK unless a transitional Brexit deal is secured, a Lords committee has warned as it criticised the Government's "sporadic" engagement with the finance industry.
In a new report, a cross-party group of peers said the UK's financial sector must be offered a Brexit "bridge" to prevent companies pre-empting uncertainty and upping sticks to rival financial centres in New York, Dublin, Frankfurt or Paris.
The group urged the Government to draw up a fixed-term transition period as part of the Brexit deal to prevent companies tumbling off the "cliff edge".
In a warning to the EU, Baroness Falkner of Margravine said any pain caused to the financial sector during Brexit negotiations would harm the UK and Europe because key services were more likely to shift elsewhere.
"Companies may decide that uncertainty is too high a price to pay so they might as well move to Dublin, they might as well move to Frankfurt - that is our great concern," she added.
"It was not a sense of panic, but our sense is that its terribly important for the Government to indicate early on what its negotiating priorities are. 'The bridge' has to be a negotiating priority."
The Lords said the Government needed a "more solid evidence base" for negotiating the position of the financial services sector, while the City lacked a "good line vision".
"The committee got a sense that (Government) engagement has been sporadic and it should be more consistent and there ought to be a clearer view," Baroness Falkner of the EU financial affairs sub-committee added.
Highlighting the issue, she said City Minister Simon Kirby "didn't seem to be gripped by a sense of urgency" during his session with the committee.
She said it took "quite a lot of questioning" to get Mr Kirby to finally reveal that the Treasury was the lead department for financial services on Brexit.