Brexit could cost London jobs if a deal is not reached with the EU in six months' time, the Head of the Royal Bank of Scotland has warned.
Sir Howard Davies said if the terms of the Prime Minister's proposed transitional deal are not known by March 2018, many businesses will start triggering contingency plans to relocate to Europe.
He told the Sky News' Sunday with Niall Paterson programme that March 2019, the date the UK is due to leave the trading bloc by, is too long to wait for the final terms of the Brexit deal. The RBS Chief said firms need a year to prepare for alternative arrangements if discussions between both sides collapse and that organisations will start shifting resources away from London.
The Government has failed to exercise wisdom
Sir Howard said the Government triggered Article 50, the mechanism for a country to leave the EU under the 2007 Lisbon Treaty, in March this year without preparing for what the final outcome will be. He accused the Government of failing to exercise wisdom.
The senior banker, who was appointed chairman of the Government-owned bank in 2015, said the time-frame for quitting the trading bloc was "very tight." He said businesses will not wait for another year in a period of economic uncertainty.
Job losses are certain
The RBS Chief attacked EU politicians for failing to speed up discussions as they had no incentive to deal with the UK seriously. He said they intend to drag out the talks and that the chances of jobs shifting to European capitals like Amsterdam, Frankfurt or Paris is increasing.
He warned job losses are certain as a result of Brexit.
Sir Howard said Brexit will lead to a re-balancing of economic activity in Europe and warned of considerable damage to the City's economic activities. He said American, Japanese and Chinese banks use London to engage in considerable financial activity with the rest of the continent and that they are nervous about the final outcome of the negotiations.
The senior banker said his company, which was bailed out by taxpayers in 2008, would only shift a small number of jobs to Amsterdam under its Brexit contingency plan.
Theresa May's plans for a transitional deal with the trading bloc were designed to ensure certainty for British organisations, as such an arrangement should see the same trading conditions in place for the immediate period after the UK formally quits the EU on March 2019.
Brussels is refusing to enable Britain to progress to discussions about a transitional deal or a future trading agreement until key issues like Ireland, EU citizens' rights and the divorce bill have been agreed.
Contingency plans are "well under way"
Justice Minister Dominic Raab told the BBC's Sunday Politics that whilst the Government intends to negotiate the best outcome for the Brexit discussions, contingency plans in the possible event of failing to reach a deal are "well under way." He said the Civil Service had to plan for all eventualities.
The Sunday Telegraph disclosed the Government will unlock billions of pounds into the economy if both sides fail to conclude a final agreement. This includes investing in new technology to speed up customs checks under World Trade Organization rules.
However, Sarah Smith, who presents the BBC's Sunday Politics, asked the Justice Minister why there were no signs of preparation for the possible outcome of "no deal", such as recruiting more customs officers and investing in more infrastructure at ports. The Justice Minister said he does not want to advertise its lack of confidence in the discussions because the Government wants to display positive tones to the EU.
Shadow Foreign Secretary Emily Thornberry said Britain should maintain a positive economic relationship with the EU post-Brexit because they are this nation's biggest trading partners. Ms Thornberry said that leaving the trading bloc with no alternative trading agreements with other nations would be disastrous for the economy.
