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City gives up on EU single market but working with Whitehall on Brexit plan

by: Mortgage Solutions
  • 19/08/2016
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City gives up on EU single market but working with Whitehall on Brexit plan
The City of London is looking to negotiate a bespoke deal with the EU allowing all of its different sectors to trade with Europe, in a similar way to Switzerland but with stronger ties.

According to the Financial Times, the City has given up on its hopes for a single EU labour market but is preparing to present policy ideas to the Committee for Brexit, chaired by Theresa May.

The City has concluded the UK cannot replicate the Norwegian deal with access to the single market but no executive say on regulations. Norway also accepts free movement of EU members and makes budgetary contributions.

The FT suggests the UK will be looking for a unique trade deal with a 110-page blueprint document already provided by the British Bankers’ Association, who were advised by Clifford Chance and consultancy Global Counsel, which was founded by Labour peer, Lord Mandelson.

A task force of grandees, chaired by Shriti Vadera, the chairman of Santander UK, and a former Labour minister, is close to embracing this judgment.

“There needs to be a bilateral deal providing as full two-way market access as possible,” said Anthony Browne, chief executive of the BBA.

The City, which was overwhelmingly in favour of remaining in the bloc before the June 23 referendum, will argue that because the UK is the biggest export market for the rest of the EU it should be able to negotiate a beefed-up version of Switzerland’s arrangement.

The government’s official negotiating position will not be revealed until the end of the year but the PM wants informal positions to be ready in the early autumn to discuss with Scotland, Wales and Northern Ireland.

Earlier this week, Michael Roth, Germany’s European Affairs minister, said that the UK could gain “special status” with the EU and have a bespoke deal. He repeated warnings, however, that the UK would not be able to “cherry pick” its position.

The BBA aims to publish several position papers on what Brexit means for banks, but Vadera’s committee is unlikely to publish any official document, as it views itself more as a sounding board. Meanwhile, consultants at Oliver Wyman are working with trade body TheCityUK to examine the consequences for jobs and activity in the sector of various Brexit scenarios.

A Treasury spokesperson said: “Our position is absolutely clear, Britain remains open for business and we will work hard to get the best deal possible deal.”

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