Lords report: Businesses will move abroad soon if trade plan is not agreed
Businesses in the UK will leave for mainland Europe soon if the Government does not agree a suitable Brexit plan, a House of Lords report has warned.
The EU financial affairs committee warned there was a risk of market fragmentation and financial instability that no one would benefit from if a deal for access to EU markets could not be agreed on.
Peers called on the Government to make it clarify what they were looking to get out of phase two negotiations as Britain leaves the EU.
The Chancellor, Brexit and Business secretary signed a joint letter to business this morning, assuring them that market access and immigration would continue as normal up until the end of the two-year transitional period.
However, committee chair Baroness Falkner warned: “There is a risk of market fragmentation and financial instability if the UK loses access to the EU, as well as harm to customers and businesses.
“The UK’s financial services sector is a global asset and both sides should want it to continue serving clients throughout Europe.
“The financial services sector needs greater clarity from the government about what it wants after Brexit, and it needs it now. A transition period is meaningless without a destination.
“Brexit is an opportunity to tailor the regulatory regime to strengthen the UK’s financial services sector, but the UK must remain committed to the international standards put in place following the financial crisis and continue to shape them to ensure a robust regulatory regime.”
Her party leader, Vince Cable, echoed her comments.
This was “a serious warning from a respected committee,” according to the former business secretary.
“Philip Hammond's comments this week that the UK and EU economies will diverge only 'very modestly' shows he is desperate to reassure the City that nothing is really going to change.
"But obviously things will. Serious business people will, therefore, be assessing their options, including whether or not to relocate to other EU countries.
"The Conservatives must stop their infighting and at least draw up some kind of coherent plan on what they want from Brexit talks."
Several high profile firms have warned a business exodus looms should Britain fail to agree suitable terms on which to leave the EU.
The European Medicines Agency announced late last year that it would move its headquarters from London to Amsterdam.