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Labour’s shadow chancellor John McDonnell takes a swipe at the City over passporting rights

Rebecca Smith
Shadow chancellor John McDonnell said he hoped banks had learned their lesson at the Labour Party Conference
Shadow chancellor John McDonnell said he hoped banks had learned their lesson at the Labour Party Conference (Source: Getty)

John McDonnell has criticised speculation that the government is considering continuing to pay some contributions to the EU, to maintain “passporting rights” for City firms and other sectors.

These would allow the companies to continue trading across the continent.

A report in the Financial Times said Theresa May's cabinet was looking into how Britain would pay billions into the EU budget after Brexit to maintain Single-Market access for the City of London and other sectors.

Read more: John McDonnell just promised to maintain access to the Single Market

“British taxpayers should not be expected to foot the bill for special privileges in accessing European markets solely for the financial sector alone," said McDonnell in a statement. "Britain has voted to leave the EU, it has not voted for paying huge fees for special favours for bankers.”

McDonnell added: “We support access to EU markets for financial services, but it is crucial for the British economy that the government insist on full, tariff-free access to the Single Market for all our industries, to protect jobs and livelihoods in the UK.”

He has previously vowed to fight to maintain access to the Single Market in the wake of Brexit, saying that the UK's financial services sector had been placed under threat by the referendum outcome.

Read more: Investors more worried about keeping passporting than immigration rights

Earlier this month, research by EY found that securing passport rights was the main Brexit concern of the financial services sector. Just over two-thirds of all policy wish lists that firms had made public after the June vote, made reference to maintaining passporting for goods and services.

Three quarters of the investment banks that have spoken out on passporting have also warned they may need to relocate or review their operations if the rights cannot be secured in the Brexit negotiations.

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