UK finance minister Philip Hammond to argue post-Brexit deal for City in 'mutual interest'

British finance minister Philip Hammond will try to convince European leaders that a bespoke post-Brexit free trade deal that includes financial services is in the "mutual interest" of both sides.

Published: 07th March 2018 05:44 AM  |   Last Updated: 07th March 2018 05:44 AM   |  A+A-

Britain's Chancellor of the Exchequer, Philip Hammond, leaves Downing Street in central London. (Photo | Reuters)


LONDON: British finance minister Philip Hammond will on Wednesday try to convince European leaders that a bespoke post-Brexit free trade deal that includes financial services is in the "mutual interest" of both sides.

In his keynote speech, Hammond will "address the sceptics who say a trade deal including financial services cannot be done", according to excerpts of the address released by his office on Tuesday.

"Every trade deal the EU has ever done has been unique," he is expected to say, pointing to prior agreements with Turkey, Canada and South Korea.

Hammond will also outline how British and EU markets are "already deeply interconnected" and their regulatory frameworks "identical".

"So I am clear not only that it is possible to include financial services within a trade deal but that it is very much in our mutual interest to do so," he will say.

The British finance minister's speech follows comments Tuesday by French Economy Minister Bruno Le Maire that any deal struck must not include financial services.

Speaking before meeting his UK counterpart, the stance is a strong response to British Prime Minister Theresa May, who said Friday trade in services as a whole needed "to be deeper than any other free trade agreement".

"We need a deal, we need a good deal," Le Maire said on BBC radio. "But once again, we have to avoid any misunderstanding between the British people and the French people, between the UK and the EU. 

"Financial services cannot be in a free trade agreement, for many reasons... For reasons of stability, for the sake of supervision because there are some very specific rules for financial services."

He added that the UK would have to accept the current system used by non-EU financial companies allowed to operate within the European Union.

"We have an alternative system which is called the equivalence regimes... I think this is the best solution for the financial services," Le Maire said. 

Under Brexit, London-based financial firms will lose their so-called passporting rights, which allow them to trade freely with other EU countries.

Large financial institutions, including British bank HSBC, Swiss peer UBS and US giants JPMorgan and Morgan Stanley, have already confirmed plans to move some London activities to Paris, as well as to Amsterdam, Dublin and Frankfurt, as a result of Britain's departure from the EU due in one year.

Le Maire on Tuesday also confirmed figures suggesting that thousands of jobs will move from London to France after Brexit.

Speaking at a press conference following talks with Hammond, Le Maire said "several thousands" of jobs would be switched from Britain.


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