February 17, 2017 11:45 pm JST

London could see Brexit exodus, says Lord Mayor

The City's ambassador upbeat over future growth despite concerns

JENNIFER LO, Nikkei staff writer

Andrew Parmley, the Lord Mayor of the City of London, during his official visit to Hong Kong on Feb. 17. (Photo by Jennifer Lo)

HONG KONG -- London could see an exodus of up to 75,000 workers when the U.K. eventually leaves the European Union, according to the Lord Mayor of the City of London.

Andrew Parmley, who serves as the figurehead of London's "Square Mile," the British capital's financial district, cited a recent study conducted by corporation. "At best, we are thinking up to 2,000 people. At worst, 75,000 people," he said on Friday.

The 1.12-square mile (2.9 square km) district is home to 414,000 financial services professionals, accounting for a quarter of the total in the U.K. The working population in the district is forecast to reach 575,000 in 2030.

"So far from giving you the story of people fleeing London, I want to reassure you that London will continue to grow by developing and investing in new vehicles to trade," said Parmley, speaking on a four-day official visit to Hong Kong. The examples he gave included growing London into a western hub of Islamic finance and a leader in financial technology and green finance.

Parmley denied a need for further incentives to retain businesses and talent after Brexit, the U.K.'s unexpected decision to withdraw from the European Union, made in a referendum last June. The country's corporate tax rate at 20% has been "among the lowest" in the G7 economies, he said, even before Prime Minister Theresa May's attempt to slash the rate to 17% by 2020.

Brexit has created uncertainty for the potential Shanghai-London stock connect program. The link aims to promote cross-border trade by connecting the two exchanges, but progress has been lagging after China's stock market rally in 2015.

Parmley assured that talks on the program were still alive and had moved into the "second phase," without giving details. He said the program had gained wide support from London and the city's stock exchange. "There is a certain amount of progress but not as much as we'd like to report... All the signs are good," he added.

Uncertainty has also grown over London's position as an offshore yuan center after Brexit. Parmley brushed aside concerns, citing positive feedback from managers of five Chinese banks he met in London earlier. "They are very optimistic and pro-London," he said. "It's very important for China that the renminbi trade is in London, which will put China firmly on the world stage."

The alleged abduction of Chinese billionaire Xiao Jianhua from Hong Kong by mainland authorities recently has aroused fears about Beijing escalating political intervention in the former British colony. Hong Kong was guaranteed "a high degree of autonomy" until 2047 under an agreement that saw the U.K. return the territory to Chinese rule in 1997.

Asked whether Hong Kong is still a safe place to do business, Parmley said: "I am not a politician." He only stressed that Hong Kong's rule of law based on the British system and the "one country, two systems" principle had worked "very well" in the territory. "It's probably still safe to work here," he said.

After Hong Kong, Parmley and his delegation will pay an official visit to Seoul before heading to Tianjin, Beijing and Shanghai later this month.

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