London — The British government’s new blueprint for Brexit is a "real blow" to London’s all-important finance sector as it will damage jobs, tax revenues and growth, a City official said on Thursday.

Thursday’s Brexit white paper "is a real blow for the UK’s financial and related professional services sector", Catherine McGuinness, policy chairwoman of the City of London Corporation, said in a statement. "With looser trade ties to Europe, the financial and related professional services sector will be less able to create jobs, generate tax and support growth across the wider economy," she said.

About £1.4-trillion in assets is managed in Britain for European clients, the government’s white paper noted, and the City hosts most of the EU’s trading for banks and insurance companies. City firms would lose their passporting rights to operate freely across the EU, once Britain exits the bloc’s single market after Brexit in March 2019, the paper conceded.

Due to deep cross-Channel links, special bilateral arrangements were also insufficient, it said. The blueprint called for a hybrid arrangement that would adopt the arrangements but also recognise "extensive supervisory co-operation and regulatory dialogue" between Britain’s financial watchdogs and their EU counterparts.

"The sector has been clear since the referendum: Equivalence in its current form is not fit for purpose so any ‘enhancements’ to this regime would have to be substantial," McGuinness said.

The government has stressed its intent to conclude a new accord with the EU to cover manufactured goods.

But services including financial services such as accounting and insurance account for three-quarters of the British economy.

"It’s in the interests of households and businesses on both sides of the Channel that an ambitious future trading relationship, covering services as well as goods, is secured," McGuinness said.

"Time is running out so it is essential that the pace of negotiations accelerates to ensure an orderly Brexit. "Both sides should engage constructively to deliver a deep and comprehensive relationship covering services, not just goods, for the benefit of consumers and citizens across Europe."