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Jessica Fino 12 Jan 2018 12:13pm

PM pledges to include financial services in trade deal

City bosses have called for a tax cut and looser bank regulations after Brexit during a meeting with UK prime minister Theresa May

In a meeting with business leaders and chancellor Philip Hammond on Thursday, May promised she would prioritise formulating a new financial services trade deal with the EU during the Brexit negotiations.

This is despite Michel Barnier, EU’s Brexit negotiator, saying last month that the EU would not do a deal where financial services were included.

He told the Guardian at the time, “There is not a single trade agreement that is open to financial services. It doesn’t exist.”

During Thursday’s meeting Barclays CEO Jes Staley asked May to loosen tax and regulatory requirements, according to a report by Bloomberg.

The news organisation reported that Staley told the PM that high taxes and red tape were impacting financial services firms based in the UK and making it harder for them to compete against US rivals.

A Downing Street spokesperson said May provided an overview of the UK’s position and update on Brexit negotiations.

The chancellor warned the executives that any moves to undermine the UK’s financial services sector would also undermine Europe’s economies.

“There was agreement that fragmentation of the European market would likely benefit centres outside of Europe,” the spokesperson added.

Some of the senior executives present at the meeting were from Barclays, HSBC, JP Morgan, Goldman Sachs, Lloyds of London, UBS, the London Stock Exchange, and Santander.

Hammond pointed out on Twitter after the meeting that financial services employ over 1 million people across the UK and generated £72bn in tax to fund public services last year.

The meeting took place on the same day that Treasury Select Committee chairwoman Nicky Morgan criticised the government for its failure to publish a paper on the future of the financial sector and services after Brexit.

Morgan told the Evening Standard that Brexit secretary David Davis should publish the “overdue” paper, adding that those within the sector were entitled to know how the government planned on safeguarding their future.

EY has also warned that, since the referendum vote, 68 financial services companies have confirmed plans to move operations abroad, and 10,500 people working in the financial services sector in the UK could see their jobs being moved to Dublin or Frankfurt.


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