London's financial centre warns of dangers of EU exit for UK

Mark Boleat, policy chairman for the City of London Corporation. [Photo by Liu Jing/chinadaily.com.cn]

A month before Britons decide in a referendum whether the country should stay in or leave the European Union, the City of London Corporation, which covers the capital's financial district, warned that its role as an international financial center will be threatened if the so-called Brexit happened.

"We at the City have looked very carefully at what EU membership means and as far as we're concerned it's been a critical factor in making the city what it is," said Mark Boleat, policy chairman for the City of London Corporation, underlining that the decision may cost large amount of jobs and new investment.

During a media briefing in the City on Tuesday, Boleat noted that the successful businesses in London regard Europe as their home market and rely on being able to attract people from other European countries.

If Britain leaves the 28-member bloc, London will be not as advantageous as it has been, because it would lack access to the single market and businesses would clearly need to build up a presence somewhere else in the European Union, he said.

Citing an analysis by Capital Economics, an analysis group, Boleat said if the referendum results was to leave, the UK's exports in financial services could decline by ￡10 billion, which may translate into the loss of 100,000 jobs.

"HSBC actually said 1,000 jobs could move to Paris but that's because it has a big European business in Paris. If it is a Chinese company, it will open business predominantly in Luxembourg," he added.

"About 400,000 people work in the city, but there are more financial services jobs outside the city than there are inside the city. It's not just about the city," he said.

"It's also not just the jobs in the investment banks or the insurance companies; it's the jobs for the people who supply things, even down to coffee and sandwiches."

According to previous surveys and analyses by the City of London Corp, the overwhelming view of city businesses is that Britain needs to be in the EU and a number of big city businesses, including Barclays, HSBC, RSA and Lloyds of London, have said that publically.

The trend has also been witnessed nationwide. A latest ORB poll made for the Daily Telegraph newspaper puts Remain on 55 percent and Leave trailing on 42 percent among people who definitely plan to vote in the referendum, which is scheduled on 23 June.

Amongst all voters, the Remain campaign now has a 20-point lead, with 58 per cent of voters saying they back the pro-EU campaign.

Boleat explained that if Britain chooses to leave the EU the country wouldn't lose all of its business overnight but it will lose some new investment and almost certainly its euro-clearing business.

"The people from Vote to Leave say that we can easily renegotiate trade deals with other countries, I think nobody who has ever been involved in trade deals believes that, no trade deal is ever easily negotiated unless we ask the other side to set up the terms."

He argued that some of those voting to leave said business in the UK will be liberated from the European regulations, but he pointed out that a large chunk of suffocating regulation is domestic in origin or made at the G20 or G8 level.

When asked about the upside of remaining in the EU, Boleat said UK could continue to enjoy the benefits of the single market by doing so and have access to cheaper goods and services, which perhaps have been underestimated and taken for granted.

Lara Wolfe contributed to this story.

To contact the reporter: liujing-4@chinadaily.com.cn