Britain’s Finance Industry Faces ‘Tipping Point’ Over Brexit – New York Times
Securing a favourable deal for financial services from the Brexit negotiations is one of the biggest challenges for the British government because it is its largest export sector and biggest source of corporate tax.
Britain’s finance industry could lose up to 38 billion pounds in revenue in a so-called “hard Brexit” that would restrict its access to the EU single market, according to some estimates.
The report said the government must ensure businesses can recruit people to fill skill gaps and must simplify the process of getting a visa.
Brexit has already made it harder to attract people to Britain and the government is introducing policies making immigration more restrictive and expensive, the report said.
It said the cost of hiring an employee on a five-year visa has risen by 250 percent to 7,000 pounds over the last year and the minimum salary a business may recruit staff for a visa has risen by almost half since 2015.
Aside from Brexit, the report also looks at broader issues that threaten the competitiveness of the City of London as financial services hub, including a need to invest in transport networks and technology.
It calls for government and financial services to work together closely to develop international trade policies and to improve the country’s digital and physical infrastructure, including speeding up travel times between airports and different financial centres around Britain.
One financial services industry veteran who had independent access to the report said it lacked urgency and there was too little on the impact of Britain leaving the EU given that “Brexit is a catastrophe for the City.”
Mark Hoban, a former financial services minister who chaired the report, said that Brexit was only one of several challenges facing financial services.
“The challenges facing financial services are much more than just about Brexit. It is about emerging financial centres and also, to a degree, about unmet needs in the UK as well,” Hoban told Reuters.
“There is a very clear appetite to tackle these issues at various levels of government.”
(Reporting By Andrew MacAskill and Huw Jones. Editing by Jane Merriman)