Britain risks losing influence, investment and thousands of jobs if it decides to leave EU

Source:Global Times Published: 2016-5-29 23:28:01

The upcoming EU referendum in the UK is making business groups and investors look carefully at what EU membership means. Sadly, if you look at media reports, you get more extreme views.

But there has been a great deal of detailed study, analysis, debate and consideration in the City, the financial center of London. Being part of the EU is a critical factor making London what it is - that is, a global financial center for Europe.

London is an incredibly international city. Around 30 percent of the population was not born in the UK. We elected a Muslim with Pakistani origins as mayor of London three weeks ago.

After all the surveys and analysis, the overwhelming view of city businesses is that Britain needs to be in the EU.

A number of big city businesses have said that publicly, such as HSBC, RSA, Standard Life and Lloyd's of London. I am not aware of a single big financial institution or trade body that says Britain is better off leaving. And a number have said it would be damaging to their business if Britain leaves.

The concern we have is the issue of "passporting," which means a financial institution is authorized, regulated and located in one EU member state but can operate in every other member state without needing to be authorized or regulated separately. To give you a few numbers on that, JP Morgan has got about 20,000 employees in the EU, 19,000 of whom are in Britain. They are having to think about relocation, because if London is not as advantageous as it was, with no access to the EU single market, then businesses clearly need to be somewhere else in the EU. JP Morgan has said that very openly. HSBC actually said a thousand jobs could go to Paris, and Chinese banks might go to Luxemburg.   

If Britain leaves the EU, it would be a useless irritation and cost for many businesses. They would have to move functions and jobs. For London, it's jobs lost forever. That's why we in London generally very much favor Britain remaining in the EU.

If Britain chooses to leave the EU, we wouldn't lose all of the business overnight. We will do our best to keep most of it. But we would lose some of it. We are already losing some new investment and we would lose more. London would still be a huge financial center in Europe, but some of the business might go to Europe, America and Singapore.

The people who want Britain to leave say we can easily negotiate trade deals with other countries. Nobody who has ever been involved in trade deals believes that. No trade deal is ever easily negotiated unless you ask the other side to set up terms.

Some say we would be liberated from European regulations, to which I ask "such as?" And then often I get silence. And we tend to take for granted the single market benefits such as cheaper phone calls, flights and services.

If Britain remains in the EU, the City of London will continue to have access to the single market, enjoy the status of Europe's largest financial center, and ensure jobs from investment banks, insurance companies, law firms, fund companies and catering and beverage companies.

The EU referendum is unprecedented. This is the most important vote of any sort in Europe in 50 years. If we vote to leave, we leave. It's not reversible. Not only would it change Britain substantially; it would also have a huge impact on the EU.

The article was compiled by Global Times reporter Sun Wei based on an Interview with Mark Boleat, chairman of the Policy and Resources Committee at the City of London Corporation. 

Posted in: Expert assessment

blog comments powered by Disqus