Brexit has yet to deliver any benefit to services sector, says London lord mayor

Brexit has been “irritating” but not as bad as feared for the City of London financial services sector, according to its Dublin-born lord mayor Nicholas Lyons, who was on a short visit to the capital this week.

Speaking to The Irish Times on the fringe of an event on Wednesday Mr Lyons said: “The City was not in favour of Brexit. We take a view that it was not in the interests of financial services and it’s become an obstacle to doing commercial things we would prefer to do.

“It hasn’t been as bad as people had expected in terms of job losses but it continues to be irritating. So far there hasn’t been any benefit to the services industry from Brexit and therefore there have only been disadvantages but there is an opportunity with some regulatory change [proposed in the UK] for that to improve.

“Brexit was not something that we wanted, it hasn’t been devastatingly bad but it’s still been worse [than] had it not happened.”

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It is estimated that some 7,000 jobs were lost in the UK financials services sector as a result of Brexit, some way below estimates around the time of the referendum in 2016.

In December, the British treasury unveiled its so-called Edinburgh Reforms for the UK financial services sector, designed to make it “open, sustainable and technologically advanced”.

“We can make sure our regulatory system is tailored to what the UK needs but it’s not going to be radical and there’s a lot proposed in the Edinburgh Reforms that have nothing to do with Brexit,” Mr Lyons said.

Mr Lyons’s visit, which included a meeting with the Taoiseach Leo Varadkar, was aimed at fostering co-operation between the financial services sectors on both side of the Irish Sea.

Addressing a British Irish Chamber event on Thursday evening in Dublin, Mr Lyons said the UK had been “missing a trick” by not investing in its resilience and infrastructure.

He said that having met officials from the Ireland Strategic Investment Fund in recent days, he believes “the time is right for a UK growth fund that will invest for the long-term growth of the economy. I want to create a future wealth £50 billion to get the ball rolling.”

While an “optimistic” figure, he said the UK has the fourth largest pension pot in the world, valued at £4 trillion, just 7 per cent of which is currently invested in productive assets compared with 19 per cent in some other countries.

Recent months have seen investment banks shed jobs globally but Mr Lyons is optimistic about a rebound in activity this year. “Investment banking employment issues are tied to M&A and equity issuance and that dropped like a stone in 2022, having been very strong in 2021. That is coming back in 2023. If you talk to the law firms in London, who are always leading indicators, they would say they’re flat out again with a lot of M&A activity. Wait three to six months and you will see that come through for the investment banks.”

Mr Lyons was born in Dublin and moved with his family to England at the age of five. He was chosen as the 694th lord mayor of the City of London, a role that sees him act as an ambassador for the UK financial and professional services sectors.