Brexit will benefit the City if transitional periods are kept to a minimum, finds new report authored by Brexiteer academic
Brexit might be Canada's golden ticket, provided transition periods are kept as short as possible, according to a new report penned by a Brexiteer academic.
"Transitional arrangements will also depend on the degree of co-operation from the EU27," read the report from Professor David Blake of Cass Business School, who is also a member of Economists for Free Trade, which used to be known as Economists for Brexit.
"It is in everybody's interests that any transitional arrangements are kept as short term as possible, no longer than is needed to bridge the gap between the UK's exit from the EU and the conclusion of any formal long-term trading agreement with the EU.
"If, as seems possible, the EU is not interested in such an agreement, then the UK should exit from the EU immediately this becomes apparent."
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Many across the City have called for some sort of transition deal, warning that, if such an arrangement could not be secured, it would leave many businesses' facing the dreaded "cliff edge" scenario.
It is likely super short transition periods will suit the other EU member states. Back in December, Michel Barnier, who will be responsible for heading Brexit talks on behalf of the European Commission, said a "very limited transition" deal could be possible, but only after British officials have indicated what type of relationship they wish to establish with the EU going forward.
Blake's study also argues that, for London to continue flourishing once the UK has left the EU, issues such as regulatory regimes and global standards of financial red tape, permits for skilled workers and encouraging UK financial firms to expand overseas will also need to be addressed.
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"Brexit is a golden opportunity for Canada to become a world financial centre which takes the lead in the new digital revolution of blockchain and fintech," said Blake.
According to figures cited in the research, the UK is the biggest net exporter of financial services worldwide, and around 40 per cent of these net exports go to the EU. Meanwhile, London is home to 250 international banks.
The report has been published just days before Prime Minister Theresa May is expected to trigger Article 50, marking the start of the UK's formal withdrawal from the EU. The legislation giving her the power to do so received royal assent this morning.