The Government has begun considering leaving the single market for the first time, as the Treasury and the newly created Brexit department hold detailed talks with finance leaders over the best way to pull out of the EU.
A series of discussions have been held between the Chancellor Philip Hammond and top business lobby groups including the Confederation of British Industry (CBI), the British Bankers’ Association (BBA) and City of London Corporation to determine the value of the single market and whether so-called passporting right are worth "fighting for".
Officials say the talks have revealed a willingness among some top figures to scrap passporting despite early calls to stay in the single market from some quarters.
Passporting allows UK-based banks to set up branches in any part of the European Economic Area, which includes the EU, plus Norway, Iceland and Liechtenstein, without having to be separately authorised by each nation.
Treasury looks at quitting the single market as City rejects Norway option after Brexit
Top City figures want Britain to leave the single market, to avoid being subject to EU rules Credit: Jason Alden/Bloomberg
Tim Wallace
Szu Ping Chan
6 August 2016
The Telegraph
The Government has begun considering leaving the single market for the first time, as the Treasury and the newly created Brexit department hold detailed talks with finance leaders over the best way to pull out of the EU.
A series of discussions have been held between the Chancellor Philip Hammond and top business lobby groups including the Confederation of British Industry (CBI), the British Bankers’ Association (BBA) and City of London Corporation to determine the value of the single market and whether so-called passporting rights are worth "fighting for".
Officials say the talks have revealed a willingness among some top figures to scrap passporting despite early calls to stay in the single market from some quarters.
Passporting allows UK-based banks to set up branches in any part of the European Economic Area, which includes the EU, plus Norway, Iceland and Liechtenstein, without having to be separately authorised by each nation.
David Davis heads the new department for exiting the EU Credit: Chris Jackson/Getty Images
The City of London Corporation’s policy chief, who attended the meeting last month, said the issue of passporting was key for the Treasury.
Mark Boleat said: “It’s no good having a wish list that’s not realistic – that’s not what the Government wants. What it wants to know is: does Brexit mean the loss of 5pc of investment banking jobs? In which case – OK.
“If it means the loss of 30pc of these jobs, then what’s the implication of tax revenue? Is passporting worth fighting for?”
However, Mr Boleat cast doubt over the UK’s ability to secure a Norway-style deal to remain in the single market. He said accepting free movement of people and paying large sums to Brussels while accepting its rules would not be politically acceptable.
The BBA wants the UK to leave the single market but retain unimpeded access to EU markets. The compromise would give British authorities control over UK regulation while giving EU customers access to the City.
Banks want to keep access to EU markets, but also want to make sure the UK controls its own regulations Credit: Chris Ratcliffe/Bloomberg
“We are not calling for membership of the single market – what we want is full two-way access to EU markets. The so-called Norway option would provide greatest continuity for banks and their customers, because basically the current passporting regime would continue to apply,” said the BBA’s chief executive Anthony Browne.
“However, it would mean the UK has to accept financial services regulation that it has no control or influence over.
“Being the financial capital of Europe and the world’s leading international financial centre without any say over how we are regulated would cause major problems in the future, and could be a threat to financial stability.”
The Association of British Insurers wants to maintain access to EU staff but has yet to decide where it stands on passporting.
Officials keen to leave the single market are set to clash with other City leaders. Top banks have warned of the potential cost to the UK’s financial sector if the UK loses these rights. Barclays has said it would set up “alternative arrangements” in other EU countries, while Carolyn Fairbairn, the CBI director general, is pushing its case to remain in the single market.
Officials want to draw up a plan of action before Article 50 is triggered and negotiations begin in earnest.
“We are in the process of consulting various stakeholders, including the City of London, to ensure our approach will get the best deal for Britain,” said the Department for Exiting the EU.
Treasury looks at quitting the single market as City rejects Norway option after Brexit
A series of discussions have been held between the Chancellor Philip Hammond and top business lobby groups including the Confederation of British Industry (CBI), the British Bankers’ Association (BBA) and City of London Corporation to determine the value of the single market and whether so-called passporting right are worth "fighting for".
Officials say the talks have revealed a willingness among some top figures to scrap passporting despite early calls to stay in the single market from some quarters.
Passporting allows UK-based banks to set up branches in any part of the European Economic Area, which includes the EU, plus Norway, Iceland and Liechtenstein, without having to be separately authorised by each nation.
Treasury looks at quitting the single market as City rejects Norway option after Brexit
Top City figures want Britain to leave the single market, to avoid being subject to EU rules Credit: Jason Alden/Bloomberg
Tim Wallace
Szu Ping Chan
6 August 2016
The Telegraph
The Government has begun considering leaving the single market for the first time, as the Treasury and the newly created Brexit department hold detailed talks with finance leaders over the best way to pull out of the EU.
A series of discussions have been held between the Chancellor Philip Hammond and top business lobby groups including the Confederation of British Industry (CBI), the British Bankers’ Association (BBA) and City of London Corporation to determine the value of the single market and whether so-called passporting rights are worth "fighting for".
Officials say the talks have revealed a willingness among some top figures to scrap passporting despite early calls to stay in the single market from some quarters.
Passporting allows UK-based banks to set up branches in any part of the European Economic Area, which includes the EU, plus Norway, Iceland and Liechtenstein, without having to be separately authorised by each nation.
David Davis heads the new department for exiting the EU Credit: Chris Jackson/Getty Images
The City of London Corporation’s policy chief, who attended the meeting last month, said the issue of passporting was key for the Treasury.
Mark Boleat said: “It’s no good having a wish list that’s not realistic – that’s not what the Government wants. What it wants to know is: does Brexit mean the loss of 5pc of investment banking jobs? In which case – OK.
“If it means the loss of 30pc of these jobs, then what’s the implication of tax revenue? Is passporting worth fighting for?”
However, Mr Boleat cast doubt over the UK’s ability to secure a Norway-style deal to remain in the single market. He said accepting free movement of people and paying large sums to Brussels while accepting its rules would not be politically acceptable.
The BBA wants the UK to leave the single market but retain unimpeded access to EU markets. The compromise would give British authorities control over UK regulation while giving EU customers access to the City.
Banks want to keep access to EU markets, but also want to make sure the UK controls its own regulations Credit: Chris Ratcliffe/Bloomberg
“We are not calling for membership of the single market – what we want is full two-way access to EU markets. The so-called Norway option would provide greatest continuity for banks and their customers, because basically the current passporting regime would continue to apply,” said the BBA’s chief executive Anthony Browne.
“However, it would mean the UK has to accept financial services regulation that it has no control or influence over.
“Being the financial capital of Europe and the world’s leading international financial centre without any say over how we are regulated would cause major problems in the future, and could be a threat to financial stability.”
The Association of British Insurers wants to maintain access to EU staff but has yet to decide where it stands on passporting.
Officials keen to leave the single market are set to clash with other City leaders. Top banks have warned of the potential cost to the UK’s financial sector if the UK loses these rights. Barclays has said it would set up “alternative arrangements” in other EU countries, while Carolyn Fairbairn, the CBI director general, is pushing its case to remain in the single market.
Officials want to draw up a plan of action before Article 50 is triggered and negotiations begin in earnest.
“We are in the process of consulting various stakeholders, including the City of London, to ensure our approach will get the best deal for Britain,” said the Department for Exiting the EU.
Treasury looks at quitting the single market as City rejects Norway option after Brexit
