The City of London's position as Europe's leading financial hub will not be undermined when the UK leaves the European Union, Chancellor of the Exchequer Philip Hammond has pledged in a speech to financial sector chiefs.As continental cities scramble to try and lure London firms to relocate amid fears that, after Brexit, institutions based in the UK will lose the 'passporting rights' that currently enable them to operate freely across Europe, Mr Hammond said the EU would not be allowed to use Brexit to introduce "protectionist" measures targeting the City of London.

Hammond: EU member countries have legitimate concerns about post-Brexit financial markets

However, in a speech at the Mansion House, the Chancellor accepted there were legitimate concerns among remaining EU member countries over the oversight and supervision of financial markets once the UK leaves the bloc."We will address them by making forward-leaning proposals for greater transparency, cooperation, and agreed standards based on international norms," Mr Hammond said. "But, let me be clear: we will not accept protectionist agendas, disguised as arguments about financial stability."It is my priority as Chancellor to ensure that the UK remains the financial services centre of the world. And the global hub of fintech. We have the time zone, the language, the legal system, the talent, the capital markets, and the tech centre to succeed."Although many banks, asset managers and insurers based in London have announced plans to open up new, post-Brexit European hubs in the likes of Frankfurt and Dublin, a survey of global finance bosses published this week named London as the world’s top financial centre.

Hammond promises to avoid "cliff edge" for business and the economy

Mr Hammond was speaking at the first annual dinner of UK Finance, a new industry body launched this year, and just hours after he and Brexit Secretary David Davis presided over the first meeting of the government's Business Advisory Group - an organisation comprising representatives of the Confederation of British Industry, British Chambers of Commerce, Institute of Directors, Federation of Small Businesses and the manufacturers' organisation EEF - to hear their concerns and priorities regarding Brexit.Mr Hammond described the meeting as having confirmed “that getting clarity soon on issues such as transition, is of vital importance to business – and thus the economy”. He said the government aimed to avoid a “cliff edge” for business and individuals and said that no existing trade agreement with non-EEA country supports the scale of business between the UK and the EU.

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Stephen Jones, chief executive of UK Finance, said the UK needed a “genuinely ambitious 21st century trade deal that reflects the needs of a modern, service-based economy”.

The City needs to improve its reputation with the public

He said the industry was working with the government on the development of a cross-border services agreement so that “an EU firm providing services cross-border to a UK customer should be afforded regulatory treatment that does not unnecessarily disadvantage it vis-à-vis a UK-based firm – of any national identity – and vice versa”.Mr Jones added the City needed to improve its reputation with the public. “We cannot expect the interests of the UK as a global financial centre to be acknowledged and prioritised by government and regulators, or welcomed by wider society, if we appear unwilling or unable to put right the wrongs of the past,” he said.For related news and features, visit our Brexit section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

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