Business for City banks will remain the same if the UK decides to leave the European Union (EU).
London does not have to panic if the UK chooses a life separated from the EU. Banks no longer have a reason to depart from Britain as their access to the European financial services will not be terminated. A report created by senior business figures challenged the idea that exiting the UK could be damaging to the Financial Service sector.
The one-thousand page report states that “Britain and its financial services industry have nothing to fear from separating from the EU’s institutions.”
The recently re-elected Prime minister, David Cameron prepares for a meeting in Brussels where he will discuss and negotiate the changes to Britain’s EU membership. Cameron will display his new deals to all the people in Britain who are eligible to vote. This will take place as a vote towards the end of 2017.
What David Cameron wants from the negotiations:
- Cut the EU red tape for SME’s and start-ups
He wants growth, jobs and opportunities.
- Return control over social and employment laws.
David wants Britain to take back some of the power from Brussels.
- Protect the City and Financial services
If the collected interests of non-Eurozone members cannot be protected then they will have to choose between joining the ‘Euro’ which the UK will not do, or leave the EU.
- Fast track international trade deals
An EU and US trade must be done by next year, this could add £10 billion to the UK economy alone, the trade deals will provide jobs and growth for Britain. Cameron is also hinting deals to other countries such as; Australia, China and India from the merging markets.
- Cut the EU budget to save taxpayers’ money
An increase to the EU’s budget between now and the next seven years should not be accepted. The pressure must stay on the EU’s shoulders year in and year out. It cannot result in the “908.4 billion ceiling being increased” according to Cameron.
- Apply UK transparency laws to the EU
Stated by Cameron “transparency should be used as a weapon to shine a light on the EU budget and how disastrously it is spent.”
- Give member states control over migration
A right to work in other European countries but not a right to claim. If any EU jobseeker does not find work within six months they will be required to leave.
- Restore Britain’s right to veto EU laws
Conservatives have suggested other changes such as:
- Abolish the common Agricultural policy
- Secure an opt-out from the Charter of Fundamental Rights
- Withdraw from the common Fisheries policy
- Withdraw from the European convention on Human Rights
The UK has been left with a win-win situation, things will either change or Britain will go. David Cameron has explained
“If our concerns fall on deaf ears and we cannot put our relationship with the EU on the better-footing then of course I rule nothing out.”
He also mentioned that “the changes are what we need and they are good for Britain and Europe, they do involve treaty changes.”
If his negotiations are unsuccessful the best option is to leave the EU according to the Business for Britain authors.
The report establishes the main and crucial fears that the UK has if it separates from the EU. The possibility that the banks will no longer have access to to the financial markets across the EU. That will include buying and selling.
Although according to the reports findings it is very doubtful that the EU would deny UK banks any access to the European capital markets. Not only would the split between the EU and London damage the UK but it would also damage the European Union if they ever did begrudge and deny access.
Even if the European Union did deny access then the UK could still gain entry because of the free trade promises made by the EU to the World Trade Organisation (WTO).
The small amount of UK influence over the EU laws may not make a difference if they were to leave the EU. However, if they were to reclaim their seat at key international financial institutions the UK may seem more significant whilst negotiating the international rules.
However, millions of jobs could be lost as it is not just banks that are tempted to move many global manufacturers are moving to cheaper countries across the EU. Leaving the UK could cause the UK economy to lose 2.2% of the entire output (Gross Domestic Product) by 2030. Britain could lose over billions in EU subsidies.
A massive advantage of the UK being a member of the EU is free trade between other members. This makes trade a lot cheaper and easier when exporting goods to Europe and importing back to the UK. Many business leaders believe that these savings cancel out the billions of pounds Britain would save if it came to exiting the EU. According to the economist if the United Kingdom departs from the EU it would be left “as a scratchy outsider with somewhat limited access to the single market, almost no influence and few friends. And one certainty: that having once departed, it would be all but impossible to get back in again.”
According to the economist, if the United Kingdom departs from the EU it would be left “as a scratchy outsider with somewhat limited access to the single market, almost no influence and few friends. And one certainty: that having once departed, it would be all but impossible to get back in again.”