London — Britain’s Prime Minister, Theresa May, will meet executives from major finance companies on Thursday to give them a clearer idea of what Britain’s EU exit will mean for them.
There are concerns that Brexit threatens London’s status as Europe’s financial capital and that banks are preparing to move thousands of jobs to the continent to preserve access to the EU’s single market.
The meeting is one of a regular series with business leaders and will also be attended by finance minister Philip Hammond and junior Brexit minister Robin Walker, a spokesman for May said.
A stand-off between Britain and the EU over future access to the single market for London’s vast financial services industry is shaping up to be one of the key Brexit battlegrounds before Britain is due to leave the bloc in March 2019.
Britain and the EU will soon begin the much harder task of defining their future trading relationship, after settling the broad terms of their divorce settlement in December.
EU chief negotiator Michel Barnier has said there will be no special deal for one of Britain’s most important industries, which accounts for more than 10% of GDP.
But British officials are confident the EU will be flexible, partly because they say European countries risk damaging their own economies if they are cut off from London’s markets.
Chancellor Philip Hammond and Brexit minister David Davis, who are visiting Germany, wrote in the Frankfurter Allgemeine Zeitung that giving Britain a good trade deal could help avert "such a catastrophe" as another financial crisis.
"We must redouble our collective effort to ensure that we do not put that hard-earned financial stability at risk, by getting a deal that supports collaboration within the European banking sector, rather than forcing it to fragment," they said.
Among those due to attend Thursday’s meeting are Jes Staley, CE of Barclays, Mark Wilson, CE of insurer Aviva, and Richard Gnodde, CE of Goldman Sachs International, sources familiar with the matter said. Britain’s financial sector employs 2.2-million people and its executives say the industry deserves to be a priority in the Brexit negotiations because it is the country’s largest exporter and accounts for about 12% of its tax revenues.
But banks and insurers are already enacting contingency plans to shift parts of their European operations from Britain if Brexit means the country does not maintain access to the EU single market.
The Bank of England has said it is plausible that 10,000 jobs may be lost by the time Britain leaves the EU in March 2019.
Consultants such as Oliver Wyman have forecast losses of 75,000 or far higher, although over several years.