Bah humbug: City lobbyist hits out at Michel Barnier's hard talk on Brexit trade deal

Courtney Goldsmith
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Tommy Steele Returns To London Palladium In 'Scrooge'
Michel Barnier, the the EU's chief Brexit negotiator, was branded as Scrooge (Source: Getty)

The EU's chief Brexit negotiator took the shine off the City's Christmas party season as he suggested a bespoke deal could not be agreed for London's financial services sector.

“There is no place [for financial services]. There is not a single trade agreement that is open to financial services. It doesn't exist," he told the Guardian and other European newspapers, adding that by leaving the Single Market, it was unavoidable that firms would lose passporting rights that allow them to operate freely across the region.

“It might be Christmas, but Michel Barnier doesn’t need to play Scrooge," responded Miles Celic, chief executive of Square Mile lobby group TheCityUK. Celic said there was no reason financial services should be dismissed from a future trade agreement.

Read more: The PM is pushing for access to the EU market during the Brexit transition

Others were more positive that Barnier's comments would spur the government to fight for a better deal.

Matthew Elliott, senior political adviser to Shore Capital and the former chief executive of the official Brexit campaign, Vote Leave, was hopeful that a deal would be struck on financial services despite Barnier "maintaining a hard-nosed approach to the negotiations".

"I expect the UK's bespoke free trade agreement to include chapters on financial services because, when push comes to shove, it benefits the prosperity of both the EU and the UK to agree a mutually beneficial result," Elliott said.

"We shouldn't panic every time Michel Barnier appears to rule something out. He's conducting a negotiation, not dictating the outcome."

"People are going to draw red lines in the sand, but as seen in phase one these things can evaporate,” added Anthony Belchambers of the Legatum Financial Services Forum.

Catherine McGuinness, the policy chair of the City of London Corporation, also weighed in. "If London were to lose its crown as the world’s leading financial hub, the main likely beneficiaries would be centres such as New York or Singapore – not elsewhere in the EU," she said.

"Businesses and families would lose the benefits of deep and integrated financial markets, while fragmentation would likely see costs rise and liquidity reduce."

Barnier's comments came as European Commission proposals seen by the Financial Times signalled a tough stance on UK bank bonuses after Brexit.

Investment banks in the UK would have to align closely to EU rules on issues such as bonus caps as the commission plans increased scrutiny of financial centres outside the EU, according to the plan.

Earlier yesterday, Prime Minister Theresa May insisted the UK would push for a bespoke trade deal "significantly more ambitious" than the EU's deal with Canada in her first cabinet meeting to discuss the "end state" of Brexit negotiations.

May said Britain should aim for a deal that enables it to set rules suited to its situation.

A spokesperson for the Department for Exiting the EU said: “The EU has said they will offer their most ambitious free trade approach. We are confident of negotiating a deep and special economic partnership that includes a good deal for financial services – that will be in the EU's best interests, as well as ours.”

Read more: Ministers have a duty to provide Brexit clarity

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