London: Bankers may be given a cribsheet to help the industry push for close ties with the European Union (EU) following Brexit, according to a document drawn up for the organisation that promotes Britain as a financial centre.
The document, reviewed by Reuters, points to growing concerns at the TheCityUK lobby group that its core messages on Brexit — that Britain must secure a transition deal and mutual market access with the EU or risk losing thousand of jobs — are getting muddied in the press and parliament.
However, the proposal has also drawn fire from within the financial services sector that it could be seen as an attempt to stamp out alternative opinions.
It could set a “dangerous precedent” by “crushing any kind of opposing view”, Helena Morrissey, head of personal investing at Legal & General Investment Management and a prominent figure in London’s City financial district, said.
The document, drafted for a key TheCityUK working group on Brexit issues, refers to mounting concerns among members about the “prominence of ideas and proposals” that could undermine the financial sector’s “key messages and asks” on Brexit.
There is an “opportunity to challenge ideas” that do not represent the mainstream industry view in private meetings. “A private document for TheCityUK members could be compiled, listing key ideas and themes that might have to be rebutted in such meetings,” the document said.
Such a cribsheet could be used when speaking with lawmakers and journalists that have no specialism in finance, it said.
Bankers have warned that London’s future as a top financial centre and tax source depends on maintaining close relations with the EU after Brexit. However, the UK government is indicating it may seek a trade deal similar to the one between Canada and the EU, which leaves out financial services.
A person familiar with TheCityUK document said it was partly aimed at Barney Reynolds, a lawyer at Shearman & Sterling.
In his “The Art of the No Deal” paper, Reynolds said a mutual recognition of rules between Britain and the EU was the best solution, but that there were alternatives that banks could consider if there is no deal.
Reynolds, who sits on TheCityUK’s advisory board, said he was not aware of what prompted the document. “As a regulatory lawyer I’m focussed on helping clients understand what the law currently says and what is legally possible,” he told Reuters.
CRITICAL TIME
TheCityUK wants a clear message on Brexit at a critical time for banks as the government starts talks on future EU trading relations, a financial industry official said.
“A lot of what Barney argues for is to say no deal is not such a bad outcome. It’s so kind of opposite. TheCityUK’s concern is that this dilutes the pragmatic message they are trying to get across,” the official said.
In a statement, TheCityUK said it was “focused on ensuring the core Brexit priorities of the industry are widely understood and communicated – those being urgent transition, mutual market access based on mutual recognition and regulatory cooperation and mutual access to talent.”
“Both the Chancellor [UK finance minister] and David Davis [Brexit minister] have acknowledged the importance of these priorities,” it added.
Reynolds has said that by drawing on existing international laws and rights, the UK financial services sector could function successfully with minimal adjustments if there is no trade deal with the EU.
“It’s law, you can rely on it. It’s used in Asia and the United States,” he told a meeting of think tank Politeia this month attended by prominent lawmakers who support Brexit.
“Those who move operations will lose money, and customers will pay more. This is a fixable situation.” Clare Woodman, chief operating officer at Morgan Stanley’s Institutional Securities, has said Reynolds’ ideas have not been backed by EU authorities and were not practical with Brexit just over a year away.
