Open Europe Report Rejects Hammond’s Services Sellout

A report published by the Open Europe think tank this morning rejects Philip Hammond’s plan to sell out the City and keep close ties with the EU for financial services. Hammond is embroiled in a row with the Bank of England after attempts by the Treasury to give up control of regulations and make the City a rule-taker. Open Europe rightly argue:

“The UK is strongly services dominated (around 80% of our economy) – we cannot simply be a rule-taker in key industries such as financial services. The approach on services therefore should be about managing divergence.”

The second section of the report calls for Brexiters to compromise on goods:

“The Single Market in goods is far more developed than services and was a significant achievement of British EU membership. We believe it makes sense broadly to maintain alignment with its rules. The EU is our most important goods’ market and the most highly-regulated sectors – electrical, automobiles, and chemicals – are the areas which we trade most with the EU and are growing the fastest. Although there might be some benefit from regulatory divergence, we judge that the Government should commit to maintaining the acquis on goods.”

Making the case for more compromise from Brexiteers, Open Europe director Henry Newman, a former Gove adviser, argues: “Open Europe’s blueprint recognises that the UK is too big an economy to be a rule-taker in areas like financial services, while accepting that we can get a very good degree of access in goods by giving up a limited amount control.” To Guido this almost seems a compromise too far. Brexiters have already demonstrated huge pragmatism over the last two years. They do not need to give up more control…




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Quote of the Day

Former Governor of the Bank of England Mervyn King…

“There are arguments for remaining in the EU and there are arguments for leaving the EU. But there is no case whatever for giving up the benefits of remaining without obtaining the benefits of leaving.”

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