The Chancellor of the Exchequer, Philip Hammond’s speech on financial services at HSBC on 07 March 2018.
Here’s a transcript
It’s great to be here in Canary Wharf, and I am grateful to HSBC for hosting me. But I am conscious that holding this event in London risks feeding the prejudice that financial services is just a London business when, in fact, of course it is a vibrant part of the economy across the length and breadth of Britain with over two-thirds of financial services jobs outside London and significant financial services hubs in Edinburgh, Leeds, Bristol, Belfast, Birmingham and Bournemouth, to name but a few.
On Friday, the Prime Minister set out the UK’s vision for its future economic partnership with the European Union in a speech which answered the call to set out “what we want” while being clear that we understand this is a negotiation, where both sides will need to give and take. As the PM said, our task, together with our European partners, is to deliver a Brexit that works for the UK and for the EU. A partnership that protects supply chains and established trade relationships that backs businesses, safeguards jobs and promotes the shared European values that we all hold.
And the first step will be delivering on the Implementation Period which was agreed as a fundamental part of the deal on Withdrawal issues that we did in December and which we expect to be formalised at the March European Council meeting. This Implementation Period is essential if we – and by “we”, I mean all of us, businesses and citizens, in all 28 countries – are to benefit from a smooth pathway to a future partnership between the UK and the EU. Nowhere will this be more important than in Financial Services, where we must work together to avoid the potential risks to financial stability that could arise if we faced a cliff-edge in March 2019. But for the Implementation Period to deliver the smooth transition we all want to see, it needs to be effective.
That means our regulators working together so that businesses – especially regulated businesses – are able to plan on the basis of it. Giving full and meaningful effect to what we agreed in December delivering clarity and certainty to businesses and citizens across Europe.
The PM was clear in her speech that after we have left the EU, we’ll be outside the Single Market and the Customs Union but equally, we’ll be free to cooperate closely with partners, including the EU, where it is in our mutual interest to do so. Financial services is such an area where we can, and should, collaborate closely recognising that a future economic partnership will always need to ensure a fair balance of the rights and obligations associated with market access.
Today I want to build on the vision the Prime Minister delivered on Friday. I want to explain why it makes sense, for both the UK and the EU, that we continue to collaborate closely on cross-border financial services. I want to challenge the assertion that Financial Services cannot be part of a free trade agreement to set-out why it is in the interest of both the UK and the EU27 to ensure that EU businesses and citizens can continue to access the UK Financial Services hub and how this is not a zero-sum game, where any loss of market share in London is automatically a gain to another EU Capital. And I want to describe what a future financial services component of a comprehensive trade partnership agreement could look like.