Flexible employment law 'can help London remain financial centre post-Brexit' Laws that allow banks to swiftly hire and fire…
James Sproule, chief economist at the Institute of Directors, said the flexibility of UK employment laws drew financial companies to London
Laws that allow banks to swiftly hire and fire staff will help London remain Europe’s financial centre after Brexit, according to an influential business lobby group.
James Sproule, chief economist at the Institute of Directors (IOD), said the flexibility of UK employment laws drew financial companies to the capital , while the use of the English language also gave London an edge over rival financial centres.
He added that the likes of Paris and Frankfurt would also have to grapple with the unpopular task of cutting corporation tax and personal tax rates if they wanted to attract bankers post-Brexit.
“London will remain Europe’s financial centre. Other cities and countries may think they desperately want to become a rival financial centre because of the potential tax revenues, but when it comes to the crunch are they willing to pay the wider political price?” Mr Sproule said.
“It is not just the advantage of the English language, although that is important. Contracts are written in English law as it is seen as being particularly amenable to commerce (necessitating a pool of English lawyers).
“UK employment law is undoubtedly more amenable to the rapid hiring and shedding of labour, an approach that banks have traditionally taken.”
Heavyweight financial firms desperate to hold on to EU passporting rights after Britain leaves the EU have been the focus of a charm offensive from rival financial centres.
A cross-party group of peers said last week that the UK financial sector must be offered a Brexit “bridge” to prevent companies pre-empting uncertainty and upping sticks to the likes of New York, Dublin, Frankfurt or Paris.
However, the House of Lords report also warned that any pain caused to the financial sector during Brexit negotiations would harm the UK and Europe because key services were more likely to shift to New York.
According to TheCityUK, a so-called “hard Brexit” – where Britain leaves the single market and falls back on World Trade Organisation (WTO) rules in order to take a tighter grip on immigration – could cost the City of London 75,000 jobs.
Mr Sproule added that some banking operations were likely to grow more rapidly in the Eurozone in the coming years, but London and the EU will still have to rely on each other.