Immigration policy may be more important than passporting for the City, says Barclays chief executive Jes Staley

William Turvill
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James E. Staley, Chief Executive Officer
Staley said finance sector companies may be forced to implement contingency plans before the government can offer certainty (Source: Getty)

Forget passporting. A potentially bigger Brexit issue for the City will be immigration policy, according to the chief executive of Barclays.

Jes Staley said his bank has 3,000 EU nationals working in the UK and that he “would love to give, as soon as we can, certainty that… their position in the United Kingdom is secure”.

“You could almost argue more important than passporting for the financial industry is the immigration policy,” he said at the Prosperity UK conference.

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What is passporting?
Passporting allows financial services firms which are authorised in the UK to operate throughout the European Economic Area, and vice versa. Without the rights, these firms would not be able to operate in other countries in the same way they do today.

According to Financial Conduct Authority figures, there are 13,484 firms in total which use passporting, of which 5,476 are based in the UK.

A number of banks and other companies are concerned these rights won't be secured in the Brexit deal so they'll need to find other solutions in keep servicing their clients.

“Getting the best and brightest students in universities in the UK, then funnelling that intellectual capital into places like London: that may be, over the longer term, the most critical component of the robustness of Barclays and the financial industry in London.”

Staley also predicted the City will not get enough certainty around Brexit negotiations before firms feel they must begin implementing contingency plans. But he added that this will not mean “great disruptions and mass migrations”.

“It would be terrific if we had certainty in short order,” he said.

“But I think that ... the financial industry is going to have to start to execute structural reform that will give certainty to continue operations beyond a two-year window, and not be completely exposed to an implementation period for whatever reason.

“I don’t believe that means, by any measure, wholesale shifts of products or services or what-not. But the contingency plans are going to start to roll forward.”

He added: “I think you will start to see movement in a reasonably short period of time. It’s not going to create any great disruptions or mass migrations. I think there is underlying a belief that we’ll come up with a settlement that will be least disruptive possible for all parties.

“But I [believe] that it’s going to be reasonably hard to get certainty around that implementation phase such as people hope.”

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