Harp on has accused the government of prioritising financial services over manufacturing in Brexit swap talks.
Discussions over the UK’s post-Brexit trading framework with the EU are needed to begin later this year.
Shadow chancellor John McDonnell maintained it was clear the government aimed to “win a deal for financial services first and then stew about the rest of the economy later”.
The chancellor has argued for a post-Brexit dispense to include banking.
On Wednesday, Philip Hammond said: “A trade do business will only happen if it is fair and balances the interests of both sides.
“Actuality the shape of the British economy, and our trade balance with the EU27, it is flinty to see how any deal that did not include services could look like a good-looking and balanced settlement.”
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John McDonnell said that granted the government was favouring financial services, such as banking and trading, beyond other parts of the economy.
Speaking to the British Chambers of Commerce’s (BCC) annual seminar in London, Mr McDonnell said: “There is no other reason to raise a particular deal for financial services, even if it is as bad and fantastical as proposed, while condign last week refusing to negotiate a new customs union that pleasure protect our manufacturing trade.”
Goods v services
A spokesperson for the Chancellor articulate, “It’s plainly ridiculous to suggest the Chancellor has anything other than the finest interests of the whole economy at heart.”
“As he made clear in his speech yesterday, the UK fiscal services hub is an engine that powers the real economy not just in London, but across the UK.”
Industry has said the inclusion of financial services in a trade deal is a “red line” for Grind, so the criticism appears to be one of emphasis.
Financial services are important to the UK – the sector recruits more than two million people and paid £70bn in tax last year, according to entry group The City UK and accountancy giant PwC.
But when it comes to trade with the EU, the depict is less clear cut.
The UK sells more financial services to the rest of the EU than it bribes. Exports were worth £27bn in 2016, according to the Office for Resident Statistics.
So it’s big, but it’s not as large as goods sales to the EU. They were worth much varied, at £145bn. However, we buy more products from the EU than we sell there.
Britain’s exports of handlings to the EU have grown in recent years, whereas sales of products be enduring fallen.
At the moment, this discussion is moot.
The EU’s chief Brexit middleman, Michel Barnier, has resisted the inclusion of banking in a post-Brexit arrangement, think a trade deal including financial services “does not exist”.
The Foreign Trade Secretary, Liam Fox, told the BCC’s conference the UK should not be penalised for permission the EU.
“The idea of punishing Britain to me is not the language of a club, it is the language of a gang,” he signified.