Britain has sidelined the minister responsible for financial services from addressing the impact on the sector of leaving the EU, a shakeup that a senior bank executive called a “vote of no confidence” in the industry’s main government contact.
Lucy Neville-Rolfe, commercial secretary at the Treasury, has had Brexit’s impact on financial services added to her official portfolio, the Treasury said on Wednesday, confirming a change that had been made without fanfare several weeks ago.
The new arrangement means Simon Kirby, the Treasury’s economic secretary, is no longer in charge of overseeing the impact of Brexit on Britain’s large banking sector.
Kirby’s post is known informally as “City minister”, as the government’s liaison to the finance industry based in the City of London, the capital’s banking district.
“Clearly, it’s a sign of a vote of no confidence in Kirby,” said one senior bank executive, one of several industry figures who discussed the change in roles on condition of anonymity to avoid taking sides publicly in a political personnel matter.
“Kirby is not responsible for Brexit even though it’s the biggest issue facing the City.”
Neville-Rolfe and Kirby both report to finance minister Philip Hammond. Kirby is listed ahead of Neville-Rolfe in the ranking of junior ministers on the Treasury’s website.
The Treasury said Kirby would still have the same role as his predecessors as City minister, overseeing the government’s overall relationship with the financial sector. Having a second minister look at Brexit reflected “the importance we place on this area”, it said in an email to Reuters in response to a request for comment on the change.
Kirby will still be responsible for answering questions from lawmakers in the House of Commons while Neville-Rolfe will lead in the upper House of Lords.
“Although the lack of continuity at this point in the process is alarming, frankly we don’t care who it is the government chooses to oversee the process, as long as they can provide some clarity to the financial services sector,” the opposition Labour Party’s City spokesman Jonathan Reynolds told Reuters in an emailed statement.
“The government must start providing some answers and guidance.”
Of the seven people who have held the post of City minister since it was created in 2008, Kirby, 52, is the first without either a background in financial services or a PhD in economics.
Britain’s position as Europe’s financial centre is emerging as one of the main issues of contention in talks over the terms of its exit from the EU. Some European politicians see an opportunity to challenge British dominance of finance after decades of viewing its free-wheeling “Anglo-Saxon” model of capitalism with suspicion.
The industry figures who spoke to Reuters said bankers in London had been complaining quietly for months that Kirby, who founded a radio station and a chain of nightclubs in the seaside town of Brighton before going into local politics, seemed to lack expertise in their field.
Several said their concerns grew after a meeting Kirby held with senior finance executives in November, at which he appeared unable to answer questions about government policy. They said they were happier with Neville-Rolfe, 64, a former senior civil servant, executive at Britain’s biggest supermarket chain Tesco and non-executive director of a number of large businesses.
(Additional reporting by William James; Editing by Peter Graff and Mark Potter)