Philip Hammond grilled by Labour MPs Wes Streeting and John Mann over Lycamobile in explosive Treasury committee hearing

Catherine Neilan
Follow Catherine
The Chancellor Of The Exchequer On The Eve Of His First Autumn Statement
Normally calm, Hammond was rattled during today's explosive hearing (Source: Getty)

The UK is "in the foothills of discussions" about financial services being included in the final Brexit deal - but the chancellor did not commit to it being included in October's agreement.

Speaking at the Treasury Select Committee this afternoon, Philip Hammond said he was "ambitious to make progress" - but he declined to comment on when it would be finalised. The chancellor told MPs he had tried to "rebut" the EU's persistent view that financial services could not be included in a free trade deal, agreeing with Conservative Stephen Hammond's assessment that without it the sector would be left "in a weak position".

In that instance the government would need assurances of "an objectivity around it which current [equivalence] regimes don't have", as well as proper mechanisms to resolve any question over deviation from mutual recognition and a "proper notice period" so that if access is to EU markets is withdrawn businesses have time to react.

He also confirmed discussions have begun with the EU about "regulator to regulator dialogue about some of the concerns the industry has".

This followed a heated exchange between the secretary of state and Labour MPs Wes Streeting and John Mann over HMRC's handling of a request from French authorities into suspected money laundering and tax fraud by telecoms firm Lycamobile.

A Buzzfeed investigation published last week revealed that the department had included as "of note" the fact Lycamobile was a major donor to the Conservatives when rejecting the request.

Hammond insisted it was an "isolated misjudgement by this individual" and repeated multiple times that the decision not to share information with the French was valid. He also noted it was not a matter for ministers, but the relevant authorities, whether to investigate individual companies.

But Streeting slammed Hammond for "gross double standards" and refusing to accept responsibility. "Get the law into the right place, that's your responsibility," he added.

A rattled Hammond replied that he "resents the tone" and after being interrupted again told Streeting: "You're not really doing justice to the gravity to the committee's interest in this, come on."

During similar questioning by Mann, Hammond muttered "This is ridiculous", before adding: "This is an individual who has written a letter and included extraneous irrelevant material that anyone could have found out... simply by Googling".

In response to Mann saying he appeared nervous, Hammond said: "I'm not nervous I'm just trying to help you because you're clearly misguided in your questions".

Related articles