Theresa May strikes conciliatory tone to keep lenders
“I value financial services in the City of London, and I want to ensure we can keep financial services in the City of London,” the British prime minister said in an interview at the World Economic Forum in Davos in Switzerland.
“I believe we will do just that.”
The comments are the warmest Ms May has made about the financial sector in her six months in the top job. In the past, she has focused on warning the global elite that its excesses can not continue.
But, following her speech on Tuesday setting out her Brexit strategy, which includes a full departure from the EU’s single market, bankers have begun setting out their own exit plans — from London.
JP Morgan Chase CEO Jamie Dimon said “it looks like there will be more job movement than we hoped for”, while HSBC CEO Stuart Gulliver said staff generating about 20% of London revenue may move to Paris.
Lloyds, Britain’s largest mortgage lender, is set to choose Frankfurt as its base for guaranteeing ties to the EU, according to a source.
Ms May’s message in Davos has been conciliatory, saying she wants to work with business.
“Financial services are of huge value to the British economy,” she said. “And of course the services that fit around the banks, asset management companies and insurance companies, are important to us as too.”
The industry pays up to £67bn (€77.3bn) in taxes each year, meaning the UK treasury will suffer a hit if London bankers leave.
Meanwhile, British finance minister Philip Hammond warned the EU yesterday Britain would find other ways to remain competitive after Brexit if it did not strike a comprehensive trading deal with the bloc.
At Davos, he stuck closely to the government’s message it wants to explore ways with the EU to ensure decades of close ties are not broken — saying that, with goodwill, anything was possible.
However, Mr Hammond said while the UK government did not want to leave the economic mainstream and trigger a race to the bottom on tax, the decision was “not entirely in our gift”.
“We have to remain competitive,” he said. “The best way is to have a comprehensive trading relationship with the EU, our closest neighbours. But if we can’t achieve that then we will have to find other ways to maintain our competitiveness, because our first obligation of government is to make sure that our people are able to maintain their standard of living.”
Mr Hammond later said this was not a threat, but German finance minister Wolfgang Schaeuble said Britain should not try to gain competitive advantage by cutting corporate tax rates after the G20 leading economies agreed not to do so in 2015.
Bloomberg and Reuters
