The UK’s exit from the European Union (EU) will have a “quite considerable” damage in the long run, says Royal Bank of Scotland (RBS) chairman Howard Davies, warning that the government of Prime Minister Theresa May has little time to prevent a jobs exodus.
Davies, who was chosen to lead the government-owned bank in 2015, told Sky News on Sunday that May and his ministers were facing a "very, very, very tight" time frame to strike Brexit deal with the EU leaders before major finance firms moved jobs abroad.
"If we go in for Brexit we will find that jobs will leave the City and there will be a re-balancing of financial activity within Europe," he said, naming European finance centers such as Paris, Amsterdam or Frankfurt as possible destinations.
The senior banker suggested "quite considerable" damage was awaiting London over time because American, Japanese and Chinese banks had already "chosen to put the enormous lion's share of activity in Europe based in London".
"They're now re-balancing and that's going to happen whatever the outcome of the Brexit negotiations are," he said, arguing that companies were concerned as negotiations were “taking quite a long time.”
He said the UK should clarify by the first three years of the next year the terms of a transitional Brexit deal if it wishes to keep things under control by March 2019, the negotiations deadline.
He said the time frame of EU talks revealed the "unwisdom" of triggering the Lisbon Treaty’s Article 50 "without knowing what the endpoint was."
May invoked the formal notice for EU departure on March 29 to begin the two-year process.
PM to prove ‘doomsayers’ wrong
May, who has promised to take the UK out of the EU even if it requires a Hard Brexit, was expected to give a speech to the parliament later on Monday.
According to British media reports, the premier was going to describe the government's ambition for a "new, deep and special partnership between a sovereign United Kingdom and a strong and successful European Union."
Noting that "progress will not always be smooth," May was going to reiterate the need for a "spirit of friendship and co-operation" in the talks.