Banks 'likely to head for New York not Europe'

Banks and bankers are far more likely to move to New York than anywhere in Europe due to Brexit, says an influential House of Lords committee.

The European Union Select Committee scotched talk in a report out today that financial services business of any significance will be lost to Frankfurt, Paris or Dublin.

The committee took evidence from leading City figures, and concluded: “We were told that much of the business lost by the UK would be more likely to relocate to New York than to the EU.”

Top bankers say in private they are keen to stay in London but need a strong Brexit deal to ensure they can keep operating in all EU countries.

Some politicians have argued the City shouldn’t get special treatment in Brexit negotiations. The Lords’ report argues strongly that it should.

“Despite the poor public perception of the sector since the financial crisis of 2007–2008, financial services are vital to the prosperity of the whole of the UK, and therefore should be an important element in the forthcoming negotiations.

"Ensuring a smooth and orderly transition to a new relationship with the EU will be a critical consideration.”

Financial and related professional services pay more than £60 billion a year in tax, of which banks pay £31 billion, the report notes.

“The health of the sector is thus hugely significant for the UK economy,” it adds.