The City of London Corporation’s policy chairman, Chris Hayward, who took over the position in May, has called for the winner of the race – between Rishi Sunak and Liz Truss – to become the UK’s next Prime Minister, to try to improve relations with the European Union.
“We should not see the EU as an enemy, we need to work in partnership with it and not against it,” he said.
“It was a challenge under (Boris Johnson) because, of course, he was seen as the architect of the final ‘Get Brexit done’ campaign. It has meant political discussions have been very, very difficult, not least, because of the Northern Ireland protocol issue, which has been hanging over our heads.”
The government introduced a bill in June that would allow it to tear up parts of the Brexit deal it signed with the EU in 2019 by removing a customs barrier between the British mainland and Northern Ireland.
The EU has said the UK is reneging on the agreement and is breaking international law. Hayward said it was important that the UK was seen to respect international law and called for the two sides to reach a deal.
“The UK has to operate within international law. We always have done and it is part of what our reputation and our integrity is based around,” he said. “I would ask the government therefore to work with the EU to come to a considered solution on that as fast as possible.”
He also called on whichever of the two becomes Prime Minister to back a proposed requirement for financial regulators to consider economic growth on top of consumer protection and financial stability in their remit. The clause is contained within the Financial Services and Markets Bill, which was unveiled by Chancellor Nadhim Zahawi last month.
“I would urge any future prime minister to ensure that this is retained,” Hayward said.
“Ensuring that Britain’s financial and professional services sector remains competitive on the global stage .... is really important in a post-Brexit Britain. So, commitment to that from both candidates from the sector’s point of view would be a really big, big plus.”
Hayward is also bullish about the movement of jobs to London’s financial district, noting “thousands” of new finance roles have come to London as a result of EU firms needing to launch UK operations post-Brexit. He said that although more UK finance jobs had flowed to the EU post-Brexit, many roles had moved the other way as well.
What has been interesting is the number of new jobs that have been created in the City as a result of European Institutions wanting and needing to open up operations in London because of Brexit, Hayward said. “Many of us were terrified that there would be a massive loss of jobs in the UK (post Brexit). That hasn’t happened.”
According to EY, the number of new hires across Europe and the UK linked to Brexit, stands at around 5,400, with around 2,900 created on the continent and around 2,500 in the UK.
Financial Conduct Authority data shows 1,500 European Economic Area firms are using the FCA’s temporary permissions regime, which allows EEA firms that were previously passporting into the UK under EU rules to continue to operate in the UK until December 2023.
Around 1,000 EEA firms could set up offices in the UK for the first time, including almost 230 firms currently domiciled in Ireland, 186 from France and 168 from Germany, the data suggests. “There has been a win/lose,” said Hayward.
“We’ve lost some jobs. But we’ve also gained a whole load of new jobs out of Europe.”
(The writer is our foreign correspondent based in the UK)
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