Oman Observer

UK financial companies now sense a softer Brexit

Andy jalil – andyjalil@aol.com – Bosses of companies in the financial district (known as the ‘City’) of London are set to push for a softer Brexit after Prime Minister Theresa May failed to win a majority in the snap General Election.
The mood was enhanced by the ministerial reshuffle following the election result, in which May allowed a number of prominent Remain-backers into her fragile new government.
In addition she appointed Gavin Barwell — who lost his constituency seat in the election — as her chief of staff.
Lloyds of London boss, Inga Beale said, “It is in the interest of the City and the UK economy for us to be able to trade freely with the EU and continue to access and attract the global talent and expertise that makes London the world’s financial heart. I hope that whatever approach is taken, this is a factor in the government’s thinking.”
The economic research firm Pantheon Macroeconomics believes there is a 60 per cent chance of a soft Brexit, and only a five per cent chance of no deal.
May has said before that “no deal is better than a bad deal”. But chief executive of advertising giant WPP, Sir Martin Sorrell said that he felt the election result meant that “paradoxically”, the chances of both a soft Brexit and a “no deal” scenario have both increased.
He said the “general view” of business is in support of a soft Brexit, meaning, in his view, “free or freer movement, and (remaining) in the Single Market”. City of London Corporation’s policy chairman, Catherine McGuinness said, “It is important for the prospect of successful Brexit negotiations that we have certainty in the political system.
In these negotiations with the EU we would hope the government recognises the importance of two-way market access, a transitional agreement and the ability of talented people across Europe to get to the best jobs.”
She added, “We cannot risk harming London’s position as the world’s leading financial centre or damaging the financial services industry, which supports 2.2 million jobs in the UK and generates £72billion in tax income. We will continue working with government and others to ensure this is understood.”
Among other comments there was one from City lobbyist and prominent Remain-backer, Iain Anderson, “For inward investors and City investors that do not want to see a hard Brexit, and want a mechanism to access the Single Market, (the election result) could well change everything.”
May went into the election pledging to quit the EU Single Market and reform immigration rules, seen by some as a so-called hard Brexit.
But her plans suffered a serious setback after the Conservatives failed to win the 326 seats needed to secure a parliamentary majority, casting doubt on the kind of Brexit May will be able to pursue.
She kept that in mind in her cabinet reshuffle early last week.
Works and pensions secretary Damian Green was handed a substantial new role as first secretary of state.
Although the role has no formal responsibilities, it conveys seniority and makes Green, a long-time ally of May’s, the UK’s de facto deputy prime minister.
There was strategy in replacing Green with Treasury Minister David Gauke and in promoting former Europe Minister and leader of the House of Commons David Lidington to justice secretary.
All three had backed a Remain vote at last year’s Brexit campaign.
The raft of appointments indicated the limit of May’s power, with the Prime Minister confirming the roles of many existing cabinet members despite speculation that some, like communities secretary Sajid Javid, were due to be sacked if May had secured a fresh majority.
She will also now win favour with Michal Gove with appointing him environment secretary after he was consigned to the backbenches.
He replaced Andrea Leadsom who has been appointed leader of the House of Commons. The surprise election result has also sparked talk of a softer Brexit in some quarters of Europe.
EU budget commissioner Guenther Oettinger told German newspaper Frankfurter Allgemeine that it has now become possible to “talk about closer relations between the UK and the European Union than Mrs May had originally planned.”
He said, “If, for example, London were to remain in a customs union, it would not have to renegotiate all trade agreements. That would greatly relieve the government.”