Guy Hands said the business outlook and investment case for the UK is only getting worse and that the country needs to reforge trading ties with the European Union to stop the rot.
(Bloomberg) — Guy Hands said the business outlook and investment case for the UK is only getting worse and that the country needs to reforge trading ties with the European Union to stop the rot.
Britain’s decision to weaken its relationship in the wake of Brexit means the country is losing its global appeal, the chairman of private equity firm Terra Firma Capital Partners said in an interview with Bloomberg TV on Thursday.
“People are going to Lisbon, they’re going to Paris, they’re going to Amsterdam,” Hands said of workers departing the UK. “As that expertise leaves you eventually reach a tipping point where the reason to be in London disappears.”
Hands is one of the UK’s best-known financiers. He backed the Remain side in the 2016 referendum on Britain’s EU membership.
He said the British government needs to improve trading arrangements with Brussels in order to repair damage caused by the country’s vote to leave the bloc. “The only thing they can do is to really try and negotiate a Swiss or Norwegian-style deal with Europe,” he said.
Any adoption of a Norway-type model would require the UK to reopen its borders to the free movement of people in return for better access to EU markets. That’s something that could be unpalatable for politicians, with curbing immigration having been a key reason for Brexit.
But Hands said the UK has already succeeded in reducing immigration by making itself an economically unattractive place to do business. He also said Britain should cut red tape to help encourage international investment, pointing to the deregulation that helped the City of London become a hub of global finance in the 1980s and 1990s.
“We are an extraordinary bureaucratic country,” Hands said. “The EU got blamed for bureaucracy. The reality is, we’ve left the EU and we’ve lost none of that bureaucracy. If anything, we’ve actually increased it.”
Read more: Financier Guy Hands Warns UK Risks IMF Rescue Without Brexit Renegotiation
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