Britain must get free access to services in return for its EU divorce bill, says Shore Capital chairman

Lucy White
UK Prepares For Possible Interest Rate Increase
The UK generated a surplus of £14bn from trade in services with the EU last year (Source: Getty)

Britain must get free access to services in return for the sum it pays to leave the EU, the chairman of investment group Shore Capital said today.

Howard Shore told financial services professionals at the Milken Institute's London Summit today that the right to freely provide services to other EU countries must be extended to the UK post-Brexit. He said the promise of free trade was not enough of an incentive for paying the "divorce bill", which has been estimated to cost around £50bn, since the EU is a net exporter to the UK.

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"What are you [Britain] going to get in return for the money?" Shore said. "It's not free trade – why would the EU want to stop free trade? It's free access to services. The EU will say this is breaking the rules, but they make the rules."

According to recent statistics from the Office for National Statistics, the UK generated net £14bn from its trade in services with the EU last year, while services accounted for 38 per cent of the UK’s exports to the European Union.

Hubertus Väth, managing director of Frankfurt's financial services body Frankfurt Main Finance, said that neither the EU 27 nor Germany had any desire to punish London for Brexit, and that Frankfurt was not hoping for a "hard Brexit" which would cut London out of the single market and customs union.

Read more: Hallo: Frankfurt eyes up to 98,000 jobs from Brexit thanks to "multiplier effect"

But he did add that "naturally, the Union's prime interest is to protect the Union". Part of this would mean making sure that any country external to the EU was to some extent disadvantaged, in order to disincentivise other countries from following Britain's leave.

Jasmine Whitbread, who leads business membership body London First, said she believed the UK's businesses could cope with whatever trade deal ended up being thrown at them as long as they had certainty.

"A voice that has become ever-louder, and as yet with no result, is the business voice that says: 'We can handle whatever the trade deal is but we need to access the flow of global skills and talent.' The government could sort that outside the negotiations," she said.

She added that firms had in fact been calling for more information on the goals of a Brexit deal since the referendum, but were managing to battle through despite little sign of progress.

"We've actually had more uncertainty, but businesses have continued to stay focused. I'm impressed with the resilience of the business community in London," she said.

Read more: London is Europe's best-performing city, according to this US think tank

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