Reality Check For City And Brexit Wheelers And Dealers

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Brexit

British Prime Minister Theresa May has revealed some of her Brexit negotiation hand at last.

May and Chancellor Phillip Hammond have given a few clues about the way Britain will approach talks with the European Union – and what they have said came as a surprise for many.

The government has confirmed the Article 50 leave button will be pressed by the end of March 2017 and that the intention is to uncouple from the EU by spring 2019.

However, a couple of the throwaway points that have leached out in TV interviews or sources close to the Prime Minister have sent shockwaves through the City.

The central issue for May is sovereignty.

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The problem is how to maintain border control and limit immigration while keeping access to the EU single market.

No compromise

Instead of coming up with a compromise solution, May has signalled Britain is ready to forego the single market because the price that this comes with is freedom of movement for EU citizens, and this is something she is not ready to pay.

Next comes passporting for the City. Financial firms based in London can trade in the EU if they are regulated in the UK, which reduces their red tape and associated costs.

The shock for the City was they are not the special ones they believed they were.

May is clear that financial firms will get no preferred treatment in Brexit talks despite the billions of pounds of tax revenue and jobs that come with passporting.

Jockeying for pole position

Get ready for a blitz of Brexit downside campaigns from the banks threatening massive job losses.

The government is convinced this media spin is just bluster and that few if any jobs will be lost and the most likely outcome is shrinking bank bonuses.

By neutralising the perceived reward for compliant negotiation away before talks start, the EU is knocked off balance.

EU negotiators were gambling the UK would want single market access at all costs only to find their solid ground has crumbled beneath them.

Stand by for more jockeying for pole position when the talks start before the end of the Tory conference and from the talking shops in Strasbourg and Brussels.

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