Bankers urge Hammond to push for transition periods ahead of Autumn Statement

 
Hayley Kirton
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Commuters walk along the riverside in London
Bankers have their fingers crossed for the Brexit negotiations (Source: Getty)

Bankers are calling on the chancellor to push to secure important rights post-Brexit ahead of his first Autumn Statement later this month.

The British Bankers' Association (BBA) has used its Autumn Statement submission to urge Philip Hammond to provide further clarity on transition periods and a more transparent negotiating timetable.

"The outcome of the referendum vote has generated uncertainty for the banking sector and added to the strategic questions resulting from a low interest rates environment, growing regulatory requirements, and increasing digitalisation," the BBA wrote. "To avoid disruption to businesses and customers in the UK and the EU, it will be important to limit disruption to financial services and the banking sector."

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Anthony Browne, chief executive of the BBA, warned last month that some banks could leave the capital before Christmas and had their hands "quivering over the relocation button", as they were pushed to plan for the worst in absence of any clear message about government's plans.

The banking body has also cautioned the chancellor that lenders are currently strained under the uneven tax system, which includes the bank levy, and this jarred with messages that the UK was open for business.

Read more: Banks' total tax bill rises to £34.2bn

The BBA wrote in its submission to Hammond: "As the government seeks to secure the UK's future as the world's leading financial sector, it is essential that the UK is, and is seen to be, a stable and welcoming tax environment for banks."

A report produced by PwC on behalf of the BBA recently revealed that banks' total tax contribution rose to £34.2bn for the year ended in March, up 3.6 per cent compared with £33bn in 2015 and driven heavily by bank levy and corporation tax charges.

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In a nutshell, financial firms in the UK currently use passporting rights to do business within the EU. A transition period would extend valuable rights, such as passporting, for a long enough period for banks to get their house in order.

Browne has also previously warned many of the alternatives to passporting, namely equivalence, will not secure banks as stable access to the Single Market as they will need and are "poor shadows" to the rules the industry currently enjoys.

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