US Bank Bosses ‘Warn Theresa May They Will Leave UK’

News ID: 1195380 Service: Other Media
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TEHRAN (Tasnim) - The bosses of several of America’s biggest banks and corporations have warned British Prime Minister Theresa May they will preemptively shift operations into Europe unless she can provide early clarity on the future shape of EU-UK relations, The Telegraph has learned.

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.

According to an account of the meeting obtained by The Telegraph, Mrs. May declined to provide information about how the British government would approach the Brexit negotiations, other than pursuing a deal that was “in the national interest”.

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.

“The message was clear from at least some of those present: if Theresa May cannot provide some early clarity about where the negotiations will end up, the only way to avoid that uncertainty would be a move towards Europe – there will not be time to wait,” said the City source with knowledge of the meeting.

Before the June 23 vote to leave the EU, the heads of several major foreign banks including JPMorgan and UBS warned that “significant” numbers of jobs could be shipped to Europe when the impacts of Brexit became clear.

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.

The move piles pressure on Mrs. May whose determination to “take back control” of Britain’s borders after Brexit, it is now widely assumed, will make it impossible to retain the City’s current “passporting” rights that enable UK-based financial services companies to trade freely in Europe.

A separate source in Whitehall said that Philip Hammond, the British Chancellor, has walked back his initially optimistic predictions for the City post-Brexit, cautioning banks that the retention of “passporting” is highly unlikely given Mrs. May’s stance on ending EU free movement.

Downing Street’s uncompromising line on curbing EU migration has caused friction between Mr. Hammond and Mrs. May’s political team which is dominated by former Home Office officials who “understand the politics of migration rather better than the economy”, the source said.

According to the account of the New York meeting, banks now accept the likely loss of EU pass-porting but warned Mrs. May there must be guaranteed transitional arrangements to give firms the time and certainty they need to adapt to the new regime.

Anthony Browne, chief executive of the British Bankers' Association, delivered a similar call for transitional arrangements when giving evidence to a House of Lords committee earlier this month, warning of the risks of a “cliff-edge” Brexit.

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