Hammond Said to Be Ready to Ditch EU Single-Market on Brexit
Well, the UK had a good run.
Chancellor of the Exchequer Philip Hammond is ready to accept that Britain may have to give up membership of the European Union’s single market -- and U.K. banks’ crucial access to clients on the continent -- to achieve the immigration restrictions that voters have demanded, according to two officials familiar with his thinking.
With the government staking its credibility on regaining control over U.K. borders after the June 23 Brexit vote, Hammond considers it unrealistic to expect actual membership of the single market after Britain leaves the EU, the officials said, speaking on condition of anonymity because the discussions were private. Instead, Treasury staff are drawing up their own blueprint which they hope will allow Britain’s financial services firms to retain similar levels of access to Europe, the officials said.
Bankers are lobbying the government to secure a stop-gap deal that will guarantee them similar provisions to those they enjoy now if there is a gap between the U.K. leaving the EU and agreeing a new free trade accord.
“Our No. 1 message is that if there is going to be a change we need a sensible period of transition,” Robert Rooney, chief executive officer of Morgan Stanley International, said in an interview this week.
There are also concerns about the consequences of Britain potentially exiting the EU customs union. Trade Secretary Liam Fox and Brexit Secretary David Davis are in favor of abandoning that agreement before the Brexit process even starts to give them a freer hand to negotiate with other countries, according to one of the officials. Membership of the customs union could impair Britain’s ability to secure trade agreements because the EU brokers external tariffs and trade deals on behalf of its members.
Well, the UK had a good run.