LONDON — The boss of Wall Street giant Goldman Sachs told Prime Minister Theresa May that her plan to drag Britain into a “hard Brexit” will clear the path for other cities to take away London’s role as Europe’s financial centre.
According to the Financial Times, which cited sources that were briefed on a closed door meeting between Lloyd Blankfein with Britain’s prime minister at the World Economic Forum this year, Blankfein “talked tough” and “said there was no reason why European financial centres can’t set up as effective rivals.”
This is unless the “government gives more priority to the City in Brexit negotiations,” said the FT.
On top of that, he was apparently “expressed bemusement” over how May “appears to treat finance like any other industry, despite its major contribution to the UK economy and its exchequer.” Goldman Sachs was one of the Remain campaign’s biggest donors.
On January 17, May outlined her negotiating stance for Brexit, which included a rejection of the single market and an end to the free movement of people, resulting in a so-called “Hard Brexit.” This would likely have the result of stripping the City of its passport.
The loss of passporting rights following Brexit is one of the biggest fears in the City of London and seems almost a certainty under May’s “Hard Brexit” plan.
If the passport is taken away, London could cease to be the most important financial centre in Europe, costing the UK thousands of jobs and billions in revenues. Around 5,500 firms registered in the UK rely on the European Union’s passporting rights for the financial services sector, and they turn over about £9 billion in revenue. There has been a surge in applications for Irish passports following the UK’s vote to leave the European Union.
Goldman employees around 6,000 people in Britain and London is its main European operation.
However, only a week ago, there was a report that said Goldman Sachs is considering cutting its staffing numbers in London by up to 50% due to Brexit fears.
It said that the bank also plans to shift 1,000 people to Frankfurt and set up a new European subsidiary as it prepares for the UK to leave the European Union. Goldman is also reportedly considering moving operations staff to Warsaw and New York, reducing the number of people in London by 3,000.
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