France trying to exploit uncertainty over Brexit: UK minister

Britain is worried that uncertainty over its planned withdrawal the European Union is helping countries like France to encourage businesses and financial institutions to move their offices out of London as soon as possible.  

Britain’s financial services minister John Glen said on Wednesday that France was particularly seeking to exploit the uncertainty over Brexit to its own benefits.

He said any of major financial groups and firms would prefer move to cities like Paris without waiting to see whether Britain would reach a deal with the EU or not.

“Clearly we are in a dynamic negotiation where the French in particular have sought to leverage as much advantage due to the uncertainty,” said Glen while addressing a committee of the British parliament.

Jobs gone on day one

The minister further confirmed estimates by the Bank of England suggesting that 5,000 financial services jobs will have moved to continental Europe by March 29, 2019, when Britain officially leaves the EU.

Glen said, however, that there had not yet been “wholesale moves of large institutions” to other cities and he would do all he can to ensure the City of London remains a major financial center.

“My sole objective in respect of the City is to ensure as much continuity as possible in respect of the economic value that is able to be generated by the City,” said Glen.

He expressed hope that Britain and the EU would finally reach an agreement that could guarantee a smooth Brexit.

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Britain and the EU are locked up in intensive discussions on how they can set out post-Brexit relations as part of an agreement that would also introduce a two-year transition period.

Issues like trade and the future state of the border on the Island of Ireland remain two key stumbling blocks in talks. The two sides hope they could reach a deal in November although there are still chances of a no-deal situation where Britain would crash out of the EU without regulating trade and other issues.

Britain’s financial services sector, arguably a best in the world, generates more than 70 billion pounds ($92 billion) in tax revenues.

British authorities are concerned that the EU might want to cut Britain’s access to its system of financial market, known as equivalence, after the Brexit.

Glen said Britain was insisting as part of Brexit talks on an agreement to restrain EU from scrapping the access to equivalence, which also includes Singapore, Japan and the United States, at short notice.

“We cannot be subject to a situation where there is politicization of equivalence and our financial institutions would be vulnerable,” he said.

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