Brexit: Philip Hammond tells EU financial services deal is in 'mutual interest'

Philip Hammond tells EU financial services Brexit deal is 'mutual interest'

Philip Hammond is to give a speech in London

Wednesday, March 7, 2018

Philip Hammond will tell European leaders that including Britain's lucrative financial services sector in a Brexit deal is in the "mutual interest" of the UK and the EU.

In a keynote speech in London today (March 7), the Chancellor will reject the arguments of "sceptics" who claim there has never been a free trade agreement which includes financial services.

He will say the "deeply interconnected" nature of the EU and UK economies means businesses and individuals have come to depend on cross-border financial services in their day-to-day lives.

His appeal comes after French economy minister Bruno Le Maire became the latest senior EU figure to reject the idea that financial services could be part of a final Brexit deal, saying the best the UK could hope for was an "equivalence regime" - whereby the UK's regulations would be considered as compliant with the EU's own.

Meanwhile, Brussels will set out its position for the next phase of Brexit talks.

European Council president Donald Tusk is holding a press conference in Luxembourg on the draft guidelines for the future relationship with the UK.

A document drawn up by the council of the EU general secretariat, seen by The Guardian, dismissed Theresa May's speech. The report set out May's Brexit vision as "a change in tone, but not in substance" and accused her of "double cherry-picking."

Hammond will build on the Prime Minister's Mansion House address, in which she accepted so-called "passporting" rights for banks could not continue after Brexit as Britain was leaving the single market.

Instead, she argued for an agreement that allows Britain and the EU to access each other's financial markets based on a commitment to maintaining the same "regulatory outcomes."

In his speech, the Chancellor will point out the EU had previously sought "ambitious financial services co-operation" in trade negotiations with Canada and the United States.

Hammond will say: "Our markets are already deeply interconnected and we have demonstrated how we can work together over the past decade as we have repaired and defended the financial stability of our continent.

"If it could be done with Canada or the USA, it could be done with the UK - the EU's closest financial services partner by far.

"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."