Lost in Transition………..?
MPs hear call for five-year transitional Brexit deal.
The head of the London Stock Exchange (LSE) has told MPs that the UK government should negotiate a five-year transitional Brexit deal. Xavier Rolet told the Treasury Select Committee this was needed to protect the UK's financial industry. He agreed that Brexit might see a massive migration of City employment to other EU countries, not just a few tens of thousands of jobs. He said the projected two years of Brexit negotiation was "too short". "What is required to maintain stability is nothing less than a grandfathering of the existing conditions of trade, for a limited period of time," Mr Rolet said. He said this could be achieved by a five-year transitional deal, maintaining existing business arrangements and regulations, starting from the point at which Brexit negotiations were triggered. The committee was hearing evidence about the UK's future economic relationship with the EU. Mr Rolet was speaking alongside Douglas Flint, the chairman of HSBC, and Elizabeth Corley, vice chair of Allianz Global Investors. The MPs were told of the fears and concerns of the financial services industry if Brexit left it outside the EU's single market and without the ease of trade that comes with it. Mr Rolet was asked what would happen if the outcome of Brexit negotiations was that LSE members could no longer handle financial transactions denominated in euros, such as the huge international trade in derivatives between the world’s banks and other financial institutions, which is centred in London. He warned that many tens of thousands of jobs might move from the UK to elsewhere in the EU, because firms, especially foreign ones, currently based in the UK would wish to continue doing business with the rest of Europe under existing EU rules. "Without a clear path to continued operation of our global businesses our customers simply would not wait," said Mr Rolet. He added: "I'm not just talking about the clearing jobs themselves which number into the few thousands. But the very large array of ancillary functions, whether it's syndication, trading, treasury management, middle office, back office, risk management, software, which range into far more than just a few thousand or tens of thousands of jobs. They would then start migrating."
Carney: Brexit risks now lower.
The immediate risk posed by Brexit to the UK economy has declined, the governor of the Bank of England has told MPs. Mark Carney said that action by the Bank before and after the vote to leave the European Union had reduced the danger to the country's financial stability. He added, however, that the overall level of risk was still "elevated". The risk was greater for continental Europe than for the UK, he said. The governor also told members of the Treasury Select Committee that a period of transition was "highly advisable". "If there is not such a transition put in place, in our view it will have consequences. We will work to mitigate those consequences as much as possible," he said. Mr Carney said that the UK should concentrate on stable access to financial markets after Brexit. The financial services industry could suffer "outsize" consequences from losing only some of its access. He also expressed the belief that it would not only be possible, but desirable for the UK to remain part of the EU mechanisms that make financial rules. He said the EU and the UK were starting from the position of having the same rules. The regulators know each other, he added, and it is a "tightly wound ecosystem".
UK exports 'show signs' of pound boost.
Evidence is emerging that the sharp drop in the pound is boosting UK exports, economists say. In November, the volume of goods exported rose at a three-month rate of 1.1%, up from the previous report which showed a 2.7% decline, according to the Office for National Statistics (ONS). Economists say that could be a sign that the fall in value of the pound since June is boosting exports. It could also be behind a rebound in manufacturing output in November. "Signs are appearing... that the weaker pound is benefitting the economy, especially in terms of rising goods exports," said Chris Williamson chief business economist at IHS Markit. "Stronger exports do at least seem to be helping drive manufacturing output higher," he added in a research note. Paul Hollingsworth UK economist at Capital Economics said there were "encouraging signs" that the drop in the pound was "having a positive impact".
Brexit: Minister hints at £1,000 fee for EU workers.
Companies could be charged to hire skilled workers from the European Union after Brexit, Immigration Minister Robert Goodwill has suggested. A £1,000 immigration "skills charge" is being brought in this April for firms recruiting workers from outside the EU. Mr Goodwill told peers a similar levy for EU workers "may be something that has been suggested to us could apply". One business group said the idea had "raised eyebrows" while a top European politician said it was "shocking". But Downing Street said Mr Goodwill's remarks had been "misinterpreted" and such a levy was "not on the government's agenda". The government says the decision to leave the EU will give the UK greater control over its borders but British firms are concerned about their capacity to fill vacancies, particularly for low-paid seasonal work, if there are limits on migration from the EU. Appearing before the Lords EU home affairs sub-committee, Mr Goodwill referred to an annual £1,000 charge on businesses for every skilled worker they employ from outside Europe, which will take effect in two month’s time. The levy, which applies to workers in "skilled areas" but with exemptions for PhD-level posts, is designed to reduce firms' reliance on migrant labour and encourage them to train more local workers. "That's something that currently applies to non-EU," the MP said. "That may be something that's been suggested to us that could apply to EU." Home Affairs Correspondent Danny Shaw said Mr Goodwill had raised the question of the charge himself rather than in response to questioning from MPs, suggesting he wanted to "float the idea". Mr Goodwill also suggested a seasonal scheme to enable agricultural workers, such as fruit pickers, to come to Britain for short periods was a possibility, telling MPs "that's certainly one of the options that could be open to us post-Brexit".
All details above from BBC News website.
[Well, with the election now only weeks away the Brexit News has come to a shuddering halt as politicians argue over who is best served to provide decent pensions, housing and school meals. I’m still somewhat undecided on how I’m going to vote on June 8th. I certainly know who I’m *not* going to vote for but who will get my ‘X’ in their box…. I might just have to decide on the day which isn’t really like me. But there does seem to be quite a few undecideds out there – I heard the figure of 20% mentioned – so things aren’t really as clear cut as the Conservatives or the Polls might be expecting. It’s going to be an interesting and important result. Not only will it determine who is in power for the next 5 years it will also determine exactly what kind of Brexit we get.]