May 10, 2021

Philip Hammond uses Mansion House speech to accuse EU of land grab of City

Chancellor Philip Hammond tonight slammed the European Union for attempting a land-grab of the Square Mile, and promised to stand firm on the UKs post-Brexit demands for the financial services sector.

Hammond used his annual Mansion House address to rubbish the so-called enhanced equivalence regime proposed by Brussels.

“These proposals have nothing to do with equivalence and everything to do with an ambition to force the location of business into the EU,” Hammond said.

“So although I have heard talk of enhanced equivalence, I have not yet seen a credible proposal for what it might mean or a clear articulation of how it might work.”

Read more: City writes to chancellor asking for shake up of tax system

Politicians and regulators are considering how to manage UK and EU regulation post-Brexit in order to maintain close ties between London and the bloc.

Enhanced equivalence – which was proposed by Brussels back in March, and viewed by City figures at the time as insufficient albeit a step in the right direction – would also not work because “enhancement, like beauty, is very much in the eye of the beholder”, Hammond told the audience.

The UK government has endorsed a proposal known as mutual recognition.

Hammond said it was the only viable model for “a stable and efficient future financial services relationship” between the two economies.

Although he acknowledged that formal discussions had not yet begun, Hammond spoke to naysayers on both sides of the Channel about the viability of mutual recognition, and went on to endorse it as a system that could be applied to partnerships with other financial hubs around the world.

Read more: Hammond: City must strike partnerships with global financial hubs

And he reiterated his warning that working together was the best way to ensure the whole of Europe remained prosperous, warning that “divided, we damage all our chances of growing businesses in Europe capable of competing in a future that will be dominated by major global players in the US and Asia”.

However, Hammond, who has been under fire for his “Eeyore” approach to Brexit and accused by eurosceptics of pushing a Remain agenda, also had a message for his critics, telling them the Treasury was not “on my watch the enemy of Brexit”.

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