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Monday, October 17, 2016

Financial sector under threat from Brexit

Bankers are not the most popular of people in this country but it is an unavoidable fact that the UK’s financial services sector employs 1.9m people and is the key to maintaining a balance of payments surplus. Without it the pound would depreciate even further and we would have further increases in the cost of living, increases which will hit the poorest sections of our society the most because they spend the highest proportion of their income on basics such as food.

It is not good news therefore to read in the Guardian that banks could start making decisions to move assets out of the UK as early as the end of 2017 if there is no deal in place to maintain their rights to sell services freely across the European Union:

Open Europe, which took a neutral stance on the referendum, said Britain could risk losing its status as a hub for financial services unless passporting rights are made the top priority in negotiations with the EU. The warning came as the Financial Times reported that the government is considering proposals [paywall] that would see billions of pounds paid into the EU budget in exchange for giving the financial sector continued access to the single market.

The report’s authors also warned that failure to help UK-based banks could have repercussions on the continent, because banks would not necessarily move their business from Britain to mainland Europe, and could opt for New York or Singapore.

Meanwhile in a speech today, Nick Clegg will echo calls from the City for a transitional deal to be put in place after the end of the Article 50 process if the UK does not retain single market membership, warning food prices will see a steep hike if the UK reverts to World Trade Organisation tariffs, including on imported beef, cheese and wine:

Clegg will warn that the under WTO rules, tariffs will also have to be applied to all imports into the UK until a trade deal with the EU is struck. In his third Brexit Challenge report, the former deputy prime minister will say UK farming will be particularly badly hit by tariffs, including 47% on milk, 40% on cheese, 59% on beef, and 40% on lamb.

It really is time for the UK Government to get a grip on this process, accept that the UK Parliament should be able to scrutinise and debate their negotiating stance and that the British people should have the final say on any eventual deal. It would also help of course if the UK Government knew what it was doing. The stakes are too high for any other approach.
When I put my X on leave the EU there was no other options besides leave or remain. There was no option for well if the remoaners loose we need to do this and do that. If it had been the other way around there would of been none of this nonsense. So for the sake of democracy get us out of that corrupt and collapsing way of life.
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