Brexit: Eurogroup chief says UK would take 'crazy step backwards' if it chooses to become tax haven after leaving the EU

Jeroen Dijsselbloem warned that such a move would hurt both Britain and the EU

Jeroen Dijsselbloem said such a scenario would be 'bad for Europe, but also bad for England' (Getty Images)

The head of the council of euro zone finance ministers said on Tuesday that the UK risks taking a “crazy step backwards” if it decides to become a tax haven in the aftermath of Brexit.

Jeroen Dijsselbloem, who also serves as finance minister for the Netherlands, said in an interview with Dutch television channel RTL that such a scenario would be “bad for Europe, but also bad for England, bad for the United Kingdom, to end up as a kind of tax paradise off the European coast.“

”In the current climate, where we are working closely with the British to tackle tax evasion, it would be a crazy step backwards,“ he added.

Mr Dijsselbloem said that he was in the process of leading discussions with some London-based banks who were considering their options for relocating after Brexit and that some were considering the Netherland’s despite the country’s relatively strict rules on compensation.

Last week, at the World Economic Forum in Davos, a host of top executives from global banks said that they were evaluating the need to relocate staff away from London as a result of UK Prime Minister Theresa May saying that Britain would quit the single Market post-Brexit.

HSBC’s chief executive, Stuart Gulliver, said trading operations that generate about 20 per cent of revenue for HSBC’s investment bank in London may move to Paris, while UBS’s chairman, Axel Weber, said that about 1,000 of the bank’s 5,000 jobs in London could be at risk.

Goldman Sachs’ chief executive, Lloyd Blankfein, said the firm had slowed the process of moving staff to London and London’s insurance market, Lloyd’s of London, confirmed plans to set up a European subsidiary as a result of the UK’s split from the bloc.