The City of London’s Brexit plans are “impossible” and should be abandoned in favour of continued membership of the EU’s Single Market, according to the man who led the Square Mile’s top lobbying body in the run-up to the EU referendum.
Mark Boleat, the policy director of the City of London Corporation until May last year, will today push for the body he formerly headed to u-turn on its plans for “mutual market access” between the UK and the EU after Brexit.
The Corporation and TheCityUK, the top lobby groups representing London’s financial services industries, have united behind the mutual market access plans, which aim for a trading relationship for financial services which is largely unchanged.
“Mutual market access is a laudable objective but has little chance of being achieved,” Boleat will say in a speech at the Cass Business School in London today.
Staying in the European Economic Area, which would keep the UK in the Single Market, would be the “least bad” option to give time to negotiate a better deal in the longer term, he will say.
“It is the only option capable of avoiding significant short-term damage to the economy generally and to the financial services industry in Britain specifically,” he will say.
However, the City groups have insisted they will continue to push for mutual recognition as the template for post-Brexit trade. The plan has been adopted almost wholesale by the government.
Miles Celic, chief executive officer at TheCityUK, said the plans for mutual recognition are “the best way to minimise disruption for customers and clients and maintain the sovereignty of both sides”.
“It is the most developed and comprehensive option currently on the table – it is also the only option which will work for both the UK and the EU.”
A City of London Corporation spokesperson said: “Our position on Brexit is clear: a transition period to avoid cliff-edge uncertainty, trade through mutual market access, and continued access to talent. These three asks are mutually beneficial and will support growth and investment across the UK and the EU.”
Boleat said that the most likely outcome for the City is a situation with “no special access” to the EU, meaning financial firms will have to rely on more restrictive and less stable equivalence provisions. However, “equivalence is wholly inadequate” to the City, he will say.
Meanwhile, he will also offer a damning assessment of the government’s delay in starting longer-term trade negotiations.
“For the City in particular, the point of no return […] has now been reached, and the negotiations are increasingly irrelevant as international financial services business are taking the necessary steps to provide services in the EU 27 from the EU 27,” he will say.
The concern over the lack of movement on the longer-term relationship is shared by many in the City. TheCityUK’s Celic said it “frustrates businesses who want an end to this uncertainty.”