Britain should negotiate a transitional Brexit deal that replicates its membership of EU structures as closely as possible, British Chancellor of the Exchequer Philip Hammond said on Friday, acknowledging that the nation cannot stay in the single market or customs union.
Hammond welcomed corporate input into the discussion on managing Brexit a day after the Confederation of British Industry said the nation should stay in the EU’s single market as it works out new ties with the bloc after its exit in 2019.
“I’m glad that the business community is exercising a voice in this discussion. I think that is helpful,” he said. “I do not believe it is either legally or politically possible to say in the customs union and in the single market.”
Hammond, speaking on the sidelines of a G20 summit in Hamburg, said his preference was for Britain to negotiate a “transitional structure” that takes it out of the single market and customs union, “but in the transition phase replicates as much as possible of the existing arrangements.”
The aim would be to minimize the shock to business.
Britain could negotiate new trade agreements with nations outside the EU, but this would involve implementation periods over time. In the near term, London needed to work out a transitional deal with the EU.
“To people who are looking to us to protect jobs, economic growth, living standards, they won’t thank us if we deliver them an instant hit with only a longer term, slowly building benefit to compensate for it,” Hammond said.
He said he had called for an agreement with the EU that “keeps trade flowing in both directions across the UK-EU border, but at the same time allows us as much leeway as we can get to open up new markets for UK goods and services.”
In the long term, he said Britain wanted an agreement that is “very business-friendly ... giving as full as possible reciprocal access to markets and as frictionless a border for our goods traffic as we possibly can achieve.”
Meanwhile, Britain’s government on Friday dismissed France’s attempt to lure high finance to Paris, saying it would ensure that London remained the global financial hub.
Paris is competing against rival financial centers in Europe for jobs that could move out of London due to Brexit.
“London is the leading global financial hub with the largest market share for financial services in the world,” a British government spokeswoman said.
“We are determined to maintain the city’s competitiveness now and in the future,” she said. “We want financial services to continue to thrive here and we stand ready to help the industry maximize the opportunities ahead.”
French Prime Minister Edouard Philippe on Friday laid out a raft of measures aimed at boosting Paris’ attractiveness.
Among the measures are scrapping a plan to widen the 0.3 percent tax on financial transactions, eliminating the top income tax bracket and keeping bonuses out of the calculation of severance pay for “risk-takers” such as stockbrokers.
Additional reporting by AFP
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