London Mayor Seeks Brexit Carve-Out as Banks Prepare to Flee

London Mayor Seeks Brexit Carve-Out as Banks Prepare to Flee

London Mayor Sadiq Khan is lobbying for a separate work permit system that would allow businesses in the city to hire talent from abroad after Brexit, even if the UK as a whole adopts a stricter visa policy for continental European immigrants, Sky News reports:

Sadiq Khan, the London mayor, told Sky News that a group of business representatives were “working on a model that will ensure we can carry on recruiting and attracting talent”. He also confirmed that he had been in discussions with the chancellor Philip Hammond as well as David Davis, the Brexit secretary and his predecessor and now foreign secretary Boris Johnson on the issue. He is also due to meet the prime minister Theresa May to lobby for London’s interests in any Brexit deal.

“We are talking to business leaders, businesses, business representatives to see what we can do to make sure London doesn’t lose out on the talent, the innovation the partnership that has let us be the greatest City in the world.”

June’s referendum on leaving the EU raised major concerns about the future of London, a global financial center with a large immigrant population whose economy depends on its links to international markets. Financial firms are particularly worried that Brexit will cost them access to the EU common market and the “passporting” rights that allow European banks to trade in all 28 member states, but losing access to European talent is also a concern. City finance is already starting to show signs of Brexit-related contraction; City A.M. flags a new report showing that the number of job openings declined sharply over the summer:

The number of advertised vacancies in financial services dropped by 13.6 per cent in the capital in July and August, according to a study by the Institute for Public Policy Reseach (IPPR) think tank and jobs analytics firm Burning Glass. The researchers said: “This is striking as it is the only year in the past four where this trend has occured.”

IPPR, a think tank associated with the moderate wing of the Labour Party, blamed the uncertainty after the Brexit vote and the ongoing wrangling over whether banks, insurers and investment houses will be able to keep their vital passporting rights which let them operate across the EU.

Banks are hedging their bets, meanwhile, to ensure that they are able to operate as normal in Europe once the UK begins the process of withdrawing from the union. Lloyd’s of London announced late last week that it was weighing the option of opening an EU subsidiary in Dublin, Paris, or Frankfurt, which would entail moving some jobs from London. Several US banks have also warned British Prime Minister Theresa May that they “will pre-emptively shift operations into Europe unless she can provide early clarity on the future shape of EU-UK relations,” the Telegraph reported over the weekend:

The ultimatum was delivered at a round-table meeting with Mrs May in New York this week attended by a host of key US investors, including major City investors such as Goldman Sachs, Morgan Stanley and BlackRock. … There followed “frank exchanges” in which bosses warned they could not wait to discover the final outcome of the two-year Article 50 negotiations before making major investment decisions that could see thousands of UK jobs shift to Europe. …

Estimates of possible City job losses from a “hard Brexit” have ranged widely from 40,000 to 80,000 over the next decade, with JPMorgan and Morgan Stanley saying they could shift over 1,000 employees. Citigroup, Goldman Sachs and Bank of America have also warned of jobs losses to the Continent.

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