British cabinet ministers are preparing to discuss the prospect of Britain leaving the European Union without a deal, amid reports the Bank of England has warned quitting could cost up to 75,000 financial services jobs.
Discussions at the regular meeting of UK Prime Minister Theresa May’s top team are expected to be dominated by Brexit, with “all contingencies” to be looked at as progress is assessed. It comes as senior figures at the Bank said estimates over job losses were a “reasonable scenario”, particularly if the UK leaves without special arrangements for the sector, according to the BBC.
The number could change if terms are agreed on financial services, but substantial losses would still be expected as jobs are shifted to the rest of the bloc, it reported.
Brexit Secretary David Davis is expected to take the lead in Cabinet talks on withdrawal on Tuesday morning. The Government is hoping EU leaders meeting in December will agree that trade talks can be started.
Reports that Mr Davis will present a “positive” gloss on a no-deal scenario have been dismissed, but ministers have stressed that “all contingencies” would be looked at as the UK assesses progress in the difficult divorce talks.
The EU has insisted that more progress needs to be made on legacy issues such as Britain’s exit bill, citizens’ rights and the Irish border before negotiations about the future trading relationship with Britain can begin.
With Mrs May under pressure from some hardline Brexiteers to walk out of withdrawal talks unless the EU gives ground on trade negotiations by Christmas, it has been speculated that the PM may avoid any firm Cabinet stance on how to move forward until the New Year.
The remaining 27 EU states agreed at a summit earlier this month to start discussing among themselves the options for trade talks with the UK. The Cabinet meeting comes as TUC general secretary Frances O’Grady is warning of a “nightmare on Brexit Street” if Britain crashes out of the EU without a deal.
Liberal Democrat leader Sir Vince Cable said: “The analysis by the Bank of England shows what is at stake should the Government be foolish enough to take us on a course that crashes us out of the European Union.
“The financial services sector is extremely important to the UK economy and for job creation.
The sector is also a major source of government revenue at a time when finances are weak. “It’s clear the so-called WTO alternative – a no deal – would be hopeless for our financial services industry. Crashing out of the European Union would be a foolish and damaging act that should not even be considered.”