24 October 2016
Lord Price said people tend to oversimplify the matter about trade agreement negotiations between the UK and the EU prior to Brexit. Photo: HKEJ
Lord Price said people tend to oversimplify the matter about trade agreement negotiations between the UK and the EU prior to Brexit. Photo: HKEJ

UK determined to keep banks, corporates after Brexit: minister

Britain is determined to retain all the financial institutions and corporates in the country after Brexit and will take all necessary measures to ensure that London remains a global financial hub, a senior official said.

“We are determined to make sure London remains one of the great financial centers in the world,” Lord Mark Price, the United Kingdom’s Minister of State for Trade and Investment, said in a media briefing in Hong Kong on Wednesday.

The UK government will take actions to reassure that financial institutions in UK will stay and can trade with the entire world, including Europe, Price said.

Since Britain voted to leave the European Union in a referendum on June 23, some foreign banks have indicated that they might shift some of their manpower from London to Paris or Frankfurt.

Jamie Dimon, chief executive of JPMorgan, said last month that the bank may slash up to 4,000 jobs in the UK while media reports said HSBC Holdings may move some of its staff in London to Paris.

“Lots of people may say lots of things. It may be oversimplified but the reality is that we want to make sure that London is a great financial center for decades to come,” said Price, who is heading to Shanghai for a meeting of trade ministers on Saturday.

“The reality is not straightforward in or out, free movement or not free movement … It’s far more complicated than that.”

Apart from an announced plan to slash the corporation tax, the UK will reveal more measures during its negotiations with the EU to boost financial institutions’ confidence to stay in Britain, he said.

In March, George Osborne, Chancellor of the Exchequer, said corporation tax in the UK would fall to 17 percent by 2020. He recently said he would reduce the rate to below 15 percent, compared with 20 percent at present.

New trade agreements

Price said the EU referendum means that the UK will have to strike new trade deals with Europe, especially on the aerospace, automotive, pharmaceutical, and food and beverage sectors.

“My job over the next few months is to provide the new prime minister and a new cabinet with options for trade agreements with EU and also the rest of the world,” he said.

“The UK runs a trade deficit with EU. It’s hard to see how we wouldn’t want to continue trading strongly with Europe,” he said.

Talking about the timeframe for Brexit, Price said, “Who knows? Nobody is in a rush. As of today, we are trading freely with Europe.”

The UK will avoid “knee-jerk reactions” and ensure a smooth, calm and professional transition from one model to the next during the Brexit, he said.

Second Elizabeth Golden Age

“We can talk to Canada, New Zealand and Australia about the beginning of a commonwealth trade pact with the UK,” Price said.

Britain can also form stronger trade ties with the United States, China, South Korea, Japan and many South American countries.

 “It’s a chance for us to act as a super trade connector to spread democracy and British rule of law, demonstrate tolerance and understanding and embrace different cultures and religions,” he said.

Price said he is confident that the UK will experience a second Elizabeth Golden Age, following the first one in the 16th century.

“We want to be a dynamic country, like Hong Kong and Singapore … From a five- to ten-year view, Britain will continue to be free, open, dynamic and want to trade with as many countries as possible.”

Despite the larger volatility in capital markets in the short term, it is the best time for investors to buy goods and assets in the UK as the British pound has depreciated, he said.

[Chinese version中文版]

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Chief reporter at EJ Insight

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