LONDON, Oct 19 (Reuters) - Finance minister Philip Hammond sought to reassure Britain’s powerful banking sector that he would protect its access to skilled labour and the European Union’s single market once the country leaves the bloc.
Hammond told lawmakers that the sector’s interests would be “a very high priority” for the government when it tries to find balance the need for continued access to EU markets with the call from many voters for tighter control on migration.
“I cannot conceive of any circumstances in which we would be using those migration controls to prevent banks, companies moving highly qualified highly skilled people between different parts of their businesses,” he said.
Britain’s financial services industry contributes around 12 percent of Britain’s economic output.
Some large banks who use London to run their EU operations have said they could start shifting staff to Europe as early as 2017 if they are not sure whether Britain will retain access to the single market or not.
Asked whether he thought it was possible to retain the ‘passporting’ rights that allow firms based in Britain to sell financial services across the EU, Hammond said it was not impossible but the government was considering other options too.
But he poured cold water on the idea of relying solely upon a regulatory ‘equivalence’ status with the EU that would allow financial services firms in Britain to operate in the bloc. He said Britain required a deal on access that would meet its particular needs.
“Equivalence is one of the routes being discussed by players in the financial services sector but of course it has some challenges around it,” he said.
“Not least that the decision on granting equivalence and continuing equivalence would lie unilaterally with the (European) Commission. It would not be a stable basis on which to plan long term.” (Reporting by William James; writing by William Schomberg and Andrew MacAskill; Editing by Richard Balmforth)