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Legal Debate: will the first casualty of Brexit be City talent?

‘The first casualty of Brexit will be City talent’. That was the motion put before an audience from across the legal industry at Thomson Reuters’ first Legal Debate of 2018 in London last week.

The debate followed what has been a turbulent period for Prime Minister Theresa May’s government as it continues to negotiate the UK’s exit from the European Union (EU). Amidst the inherent uncertainty generated by Brexit, it is still rather unclear what type of relationship the UK will have with the EU after it leaves – and the impact this will have on the business sector. Could the City of London be at risk of being drained of talent post-Brexit and, importantly, will its ability to attract talent be weakened, or has its demise been overexaggerated?  

The pre-debate vote by the audience showed that 55 percent backed the debate’s motion, while 45 percent believed that City talent will not be the first casualty of Brexit. Vying to reverse the audience’s pre-debate consensus, Michael Howard, former leader of the Conservative Party, and Francis Hoar, Barrister at Field Court Chambers, argued against the motion. Meanwhile, Ken Clarke, former Chancellor of the Exchequer, and Anneli Howard, Barrister at Monckton Chambers, were both arguing for the motion.

Will there be a loss of talent?

“I have never seen such a mad situation in British politics”, Clarke said as he kicked off the debate. The Rushcliffe MP opened by delivering his broadside assessment of the Brexit process, lamenting the government’s well-publicised internal disputes over its negotiation approach  ̶  claiming that it ‘was not capable of agreeing’.

Then, focusing on the potential loss of City talent, Clarke conceded that it is dependent on the final outcome of the Brexit talks. “I think that probably one of the casualties is going to be a brain drain from the City”, he said. “It depends how isolationist, how nationalist we go, and whether we succeed in avoiding – what is the real risk – winding up with just erecting a whole new set of trade barriers, through tariffs, new customs procedures, new regulatory divergence, with closed borders again between ourselves and our principle market, and our nearest major markets”.

Michael Howard was up next ready to argue against the motion. First, though, he drew the audience’s attention to a prediction made by pro-remainer Clarke, who, Howard claimed, had previously said the ‘public mood is changing on the Euro’ and there is an ‘alarming fall’ in inward investment into Britain as global companies are increasingly reluctant to locate here. “I don’t need to tell you of all people how laughably wide of the mark that prediction has been”, Howard said. The gloves were now well and truly off.

Referencing the referendum campaign in 2016 – which has often been criticised for its lack of facts and scaremongering – Howard was keen to focus on what he described as the evidence. The jobs market is healthy, he said. “Just a few months ago, City recruiters Hays released data that showed that more than two thirds of the financial services firms in London are planning to hire more staff in the next 12 months”, Howard claimed.

“And in January, the chief executive of the Page group, one of the biggest recruiters in the professional services market, and one of the largest recruitment businesses across Europe – so in an ideal place to monitor cross-border moves – said we’ve not seen any evidence of UK financial services jobs moving to Paris, and it’s the same for Frankfurt”.

Anneli Howard was keen to fire back, and did so in convincing style. Unsurprisingly, as an expert in the area of EU law, Anneli came to the debate armed with detail on what she believes indicates impending job losses for the City. Acknowledging [Michael] Howard’s previous assertion that talent is going to stay in London, Anneli argued that ‘we haven’t actually left yet so the implications are not feeding through’. The barrister then focused on three industries including pharmaceuticals, broadcasting and creative arts and services generally, claiming each sector will face job losses in the City post-Brexit. She added: “We have the MHRA [Medicines & Healthcare Products Regulatory Agency] and the EMA, the European Medicines Agency here, but not from next year. The decision has already been taken to transfer the EMA to Amsterdam.

“The MHRA traditionally has carried out extensive scientific evaluation and peer to peer reviews for the EMA. After these drugs are authorised there has to be ongoing monitoring and pharmacovigilance. So, we do have a hub of scientists and expertise here in London that has grown over 40 years in providing those services. Those workstreams will go to The Netherlands and will lead to job redundancies here”.

Energetic and confident in his delivery, Francis Hoar was up next and did all he could to win over the opinion of the audience. He first elected to champion the City, adding that it is the ‘only global player in Europe’, branding Frankfurt as no more than a ‘regional financial hub’.

There has been much debate around the future legal and regulatory landscape for the UK post-Brexit, and if it could lead to changes to market practice. Hoar argued that regardless of the outcome of the Brexit negotiations, London will likely remain as the most attractive hub for litigation on a global scale, in part because the capital’s judges are the preferred option for most litigants.

Emphasising the resilience of the City and its influence on the continent in comparison to the other member states, Hoar went on to question the credibility of previous forecasts about potential significant job losses in the City, which he said were yet to happen. He concluded: “Brexit not just an opportunity but a threat. And that threat is not to London but to the rest of the European Union”.

At this point, the chair, Reuters Editor-at-Large Axel Threlfall, took questions from the audience. It led to some gripping exchanges among the debating panel – particularly between political heavyweights Clarke and [Michael] Howard, who clashed over the UK’s future trading relationship with the EU post-Brexit.

The debaters made closing comments and appealed to the remaining swing voters in the audience, after which the final votes were counted. Despite Hoar and [Michael] Howard both making compelling cases against the motion, those arguing for the motion were the winners on the night. The final audience split – unchanged from the pre-debate vote – had 55 percent backing the motion that City talent will be the first casualty of Brexit.

The debate around Brexit will no doubt continue in the months ahead. Follow Legal Insights’ Brexit FAQ Updates for all the latest developments.

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