12-10-2016, 11:55 PM
Large banks in Britain want the UK government to allow their industry to remain subject to EU laws for up to five years after Brexit, a move likely to enrage eurosceptics who want to break away from the bloc's legal system as soon as possible. The banks - international players - are also pressing the government to allow the European Court of Justice to rule on decisions related to their businesses during that period, according to a document reviewed by Reuters... The document warns of the potential shock to the British and European economy from a loss of critical financial services if banks do not secure a transition phase beyond the two-year withdrawal period that will begin when the government invokes Article 50 of the EU's Lisbon Treaty. If no transition deal is agreed, there is a risk that some banks may not be able to move parts of their operations out of Britain or set up new British subsidiaries in time, the document says, running the risk that the banks may have to halt their EU business activities abruptly... It would normally take banks as long as three years to relocate operations, according to the document, but due to the large number of firms seeking to do this simultaneously regulators may be flooded with requests, slowing down the process.
Banks want to be subject to EU laws for five years in post-Brexit deal
The document records Mr Davis predicting that the Article 50 exit clause will be triggered “in very late March” – and that opponents in Parliament will “run out of speakers”. And it underlines earlier hints that, if the EU proves “hostile” in the negotiations, Britain will cut taxes and regulations to lure overseas investors. It has previously been suggested that corporation tax will be cut to 10 per cent – despite warnings that the EU will inevitably respond by slapping fresh restrictions on trade. The memo – of a meeting with the City of London Corporation – lays bare how Britain’s opening gambit will be the “have our cake and eat it” approach, in Boris Johnson’s much-mocked phrase.
Crucially, the memo states: “Will trigger Article 50 with an opening approach of open access on all services and goods without tariffs in the UK.” Tim Farron, the Liberal Democrat leader, said: “David Davis is completely deluded to think you can leave the single market while maintaining full access to it. “He should be listening to the concerns of businesses that trade with Europe every day instead of sticking his head in the sand. “The reality is that a hard Brexit would hit jobs and mean less tax revenue for our schools and NHS.”