Trying to damage the City “in pursuit of a narrow, hypothetical national advantage would be a huge mistake for any of our European Union partners to follow”, Hammond said.
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“Ensuring UK-based financial institutions have continued ability to support the needs of businesses and individuals and to add value to the economy as a global financial centre, is in all our mutual interests”.
His comments were among the strongest yet in support of the City of London finance industry since the referendum, and echo arguments being put forward by the sector itself.
Asked about implications of leaving the European Union for the UK’s large financial services sector, Hammond said it was in the EU’s interest for the United Kingdom to have free access to markets.
Many economists have said record low borrowing costs and Britain’s weak growth prospects present an ideal opportunity for the government to break away from the tight controls on spending imposed by former finance minister George Osborne over the last six years and borrow to fund major infrastructure projects.
“I don’t think that needs to strike fear into the heart of Japanese financial institutions because I would expect due to the control that we would have over movement of people we would use it in a sensible way that would certainly facilitate the movement of highly skilled people between financial institutions and businesses in order to support investment in the United Kingdom economy – that would certainly be my expectation”.
Chancellor Philip Hammond said he understands “the scale of the potential impact leaving the European Union could have for parts of the financial services industry” and will listen to what the industry has to say on key issues, like access to the single market.
Hammond also said he agreed that Britain needed to build more homes. “What I have said is that we will not target that at the end of this parliament (in 2020)”.
Chancellor Philip Hammond has hit back at Francois Hollande after the French president suggested that euro clearing could move to Continental financial centres in the aftermath of Brexit.
But Hammond said big projects would take too long to deliver an economic benefit.
“Most of the people that I am talking to do not believe that you can break off bits of the clearing system. Majority do not believe you can persuade clearing to go to any place it does not want naturally to go”.
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The chancellor also said efforts to dilute London as a center for clearing would only force up the cost of it and benefit financial centers such as NY rather those elsewhere in Europe.
