Peers warn over City exodus after Brexit

Posted On: 
15th December 2016

Financial services firms could flee the City and set up in rival locations unless a transitional Brexit deal is struck, a House of Lords committee has warned.

Peers said "red lines" should be set out for City rules after Brexit
Credit: 
PA Images

The cross-party group of peers said a “bridge” agreement would be needed to stop firms falling off a “cliff edge”.

Business groups have been lobbying the Government for an interim deal in case new trading arrangements are not settled by the time Britain leaves the EU.

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In a report out today, the EU financial affairs sub-committee said uncertainty over cross-border trade could cause firms to up sticks from London.

Lib Dem chair of the committee Baroness Falkner said “red lines” must be set out on issues such as passporting rights – which allow companies to trade across the EU while based in the UK.

“Companies may decide that uncertainty is too high a price to pay so they might as well move to Dublin, they might as well move to Frankfurt - that is our great concern," she warned.

Theresa May has shown support for a transitional deal to avoid a “cliff edge” scenario, while Chancellor Philip Hammond this week threw his weight behind the prospect of an interim arrangement between the UK and the rest of the EU.

Brexit Secretary David Davis said yesterday he would support such a plan “if it's necessary,” and in the past has called for "maximum access to markets with the minimum disruption" as part of a "smooth and orderly" exit.