Top banks already working on Brexit exodus plan - BBA

Major international banks, most of which have their European headquarters in the UK, are set for a mass exodus from Britain in early 2017 as a result of Brexit uncertainty, according to the British Bankers Association.

The UK financial sector currently employs more than two million people and makes up almost 12 percent of the economy. Within the EU, firms can depend on a European “passport” to easily serve clients across the 28-country block.

however, writing in the Observer newspaper, Anthony Browne, chief executive of the BBA lobby group, said the removal of such freedom could force big banks to leave and the public and political debate was “taking us in the wrong direction” with businesses unable to wait until the last minute for clarifications.

“Most international banks now have project teams working out which operations they need to move to ensure they can continue serving customers, the date by which this must happen, and how best to do it,” said Mr Browne.

“Their hands are quivering over the relocate button. Many smaller banks plan to start relocations before Christmas; bigger banks are expected to start in the first quarter of next year.”

Mr Browne said that while finance minister Philip Hammond and Brexit minister David Davis were “making the right noises”, he was concerned that some high-profile Brexit supporters believed banks did not need passporting and could rely on so-called equivalence, under which the EU can allow access to its markets for countries whose regulations are similar to the bloc’s.

“The EU’s equivalence regime is a poor shadow of passporting, it only covers a narrow range of services, can be withdrawn at virtually no notice, and will probably mean the UK will have to accept rules it has no influence over,” he said.

“For most banks, equivalence won’t prevent them from relocating their operations.”

Reacting to Mr Browne’s comments, the Scottish Government described news that banks are preparing to pull out as “further evidence of the deeply damaging effect of the UK leaving the EU on our economy”.

Earlier this year, trade body TheCityUK, which represents Britain’s financial services industry, said the number of people employed across Scotland’s finance sector has reached almost 160,000.

Stephen Gethins MP, the SNP’s Europe spokesperson, said: “We’ve already heard that leaving the EU could cost Scotland up to 80,000 jobs and the Scottish Government is determined to protect Scotland’s place in the EU single market which is essential for our jobs and economic growth.

“It is a disgrace that the UK Government has refused time and time again to guarantee the position of EU citizens living and working in the UK and the Scottish Government will continue to call for powers over immigration to be devolved to the Scotland so that we can deliver an immigration system that best meets the needs of the Scottish people.

“The Better Together campaign claimed the only way to keep Scotland in the EU and the only way to ensure banks and other institutions would remain based in Scotland was to vote no to Scottish independence - it is very disappointing that the people of Scotland have been let down on these promises.

“The SNP is clear - the people of Scotland voted overwhelmingly in favour of remaining a member of the EU and the Scottish Government is exploring every option for protecting Scotland’s interests.”

Scotland’s First Minister Nicola Sturgeon will today meet Prime Minister Theresa May in London for talks, along with the devolved administrations of Wales and Northern Ireland.

It is the first time the Joint Ministerial Committee (JMC) has met since the EU referendum four months ago.

Downing Street said Mrs May would set out her vision for a new way of working between the UK government and the devolved administrations.

The Prime Minister will propose that the JMC - a body made up of representatives from the UK government and the devolved administrations of Wales, Scotland and Northern Ireland - meets at least yearly and is hosted by each government on a rotating basis.