BrexitJan 11 2017

City calls for three-year Brexit pause

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City calls for three-year Brexit pause

The chairman of the Treasury select committee has said industry calls for a three-year delay to Brexit are “significant”.

Three senior figures from the City of London appeared before the committee yesterday (11 January) to discuss Britain’s future relationship with the European Union.

They said companies would need a three-year “standstill” so they could adjust to new arrangements.

Xavier Rolet, chief executive of the London Stock Exchange, said Brexit posed global systemic risks if carried out too quickly.

Meanwhile Douglas Flint, chairman of HSBC, said London’s ecosystem is like “a Jenga tower”.

Speaking after the hearing, Andrew Tyrie, the committee’s chairman, said: “The unanimity among these leading City figures - about the need for a three-year ‘standstill’ at the end of the Article 50 process - is significant.

“They argued that without such an arrangement, major banks and other financial services firms will take pre-emptive action at a cost, perhaps large, to the sector and the wider economy.

“They also made other important points. Preserving the access arrangements provided currently by passporting is an important objective.

“Accepting the loss of one part of the financial services industry, such as euro clearing, could have unintended and disruptive consequences, for the UK and the European Union.”

Prime minister Theresa May has committed to triggering Article 50 – the mechanism which will end Britain’s membership of the European Union – by the end of March.

This will begin the two-year Brexit negotiations at the end of which Britain will no longer be a member of the European Union.

Ms May has indicated Britain will be leaving the single market, saying she is not interested in trying to “keep bits of membership” of the European Union, but she has not explicitly said this.

damian.fantato@ft.com