The City of London Corporation, the local authority that covers much of the financial district, urged Theresa May to arrange transition arrangements “as soon as possible”.
Mark Boleat, policy chair of the City of London Corporation, said: “Brexit has brought with it a significant amount of uncertainty for businesses in the services sector.
Important strategic business decisions are being delayed and much needed investment postponed or withdrawn altogether. Firms’ nervousness can only be allayed if they know how they can continue running their business. A transitional arrangement should be agreed as soon as possible.”
There are suggestions that triggering article 50 in March – signalling the formal process of exiting the EU – could prompt firms to start implementing contingency plans to ensure they are able to continue conducting business while a Brexit deal is agreed.
Boleat said: “Theresa May’s government has the most complex and nationally important international negotiations since the end of second world war ahead of it, and for the good of British business and workers in Britain we must get this right.”
Despite his urge for clarity, Boleat added: “I have no doubt that whatever happens in 2017 that the City of London will remain the world’s leading financial centre. However we cannot be complacent and must continue investing in infrastructure and education while working to secure the best possible business links with the European Union and the world.”
The corporation has published data showing that financial and professional and financial services employ more than 2.2 million people across the UK, not just in the City.
Boleat did not outline the detail of what he thought a transition agreement should contain. He is not alone in calling for such a deal. Sam Woods deputy governor of the Bank of England, told MPs on the Treasury select committee earlier this monththat details of that arrangement would be needed within nine months of article 50 being triggered. Woods told the MPs that firms could roll out their contingency plans in a few months.
Chancellor Philip Hammond has said the government would seek a transitional deal to help smooth the Brexit process in order to avoid disruption that could risk Britain’s “financial stability”.
The Lloyd’s of London insurance market is said to be preparing to open a subsidiary in another European country in preparation for Brexit and other City institutions are expected to follow suit.
The vote for Brexit is thought to be among the reasons that the UK arm of Santander has revised the way it intends to implement the ring fencing rules designed by Sir John Vickers.
Banks must comply with these requirements to separate the high street and investment banking arms by 2019. Nathan Bostock, chief executive of Santander UK, said: “The newly approved business model retains the majority of our operations within one ring-fenced bank, providing greater certainty for our customers and flexibility for the future.”