The Chancellor (pictured in London last month) told financial bosses that he expects the EU to pass laws which restrict the operation of the Square Mile in the years after the UK’s departure
Philip Hammond has warned the UK’s banking bosses that France will spearhead a bid to bind the City with red tape and swoop on its lucrative business after Brexit.
The Chancellor told financial bosses that he expects the EU to pass laws which restrict the operation of the Square Mile on the continent in the years after the UK’s departure.
And he warned Emmanuel Macron’s France will be the driving force behind this bid as Paris tries to muscle in on business and become Europe’s new financial centre.
Mr Hammond made the candid warning to City figures at a private meeting designed to drum up support for the Government’s Brexit Chequers plan last month, The Financial Times reports.
The Cabinet minister reportedly urged the business bosses to develop ‘alternative pathways for growth’ in emerging economies outside the EU to help Britain’s economy withstand the attack.
The warning has been made public just days after Mr Macron held Brexit talks with Theresa May at his Riviera retreat.
The French President has made no secret of his desire to lure lucrative business away from London to Paris after Brexit.
He has launched a charm offensive – dubbed Operation Seduction – to convince firms to pack up and move across the Channel.
In January this year he hosted 140 top executives from firms including Google and Facebook, at the opulent Palace of Versailles.
Meeting with the UK’s financial services bosses on July 16, Mr Hammond predicted that the EU would initially try to minimise disruption to markets because of Brexit.
But he predicted that over time the EU would pass laws which would ind the UK up in red tape and seriously ‘test the UK’s tolerance’.
He said this would leave Britain facing a stark choice – either comply with the new regulations or ignore them and lose access to EU markets.
He reportedly told bosses: ‘It is important that the UK is able to display in parallel a strategy to grow non-European financial services business, such that the threat to pull out of EU arrangements is seen to be real.’
The Chancellor also claimed France is interested in ‘politically motivated rule changes’ because Paris wants to seize business from London.
A note of a meeting said: ‘The Chancellor views the appetite of all countries except France to target UK-based financial services as limited.’

The French President Emmanuel Macron (pictured holding Brexit talks with Theresa May in France last week)has made no secret of his desire to lure lucrative business away from London to Paris after Brexit

The UK Government wants bosses from the City of London (pictured) to do more to drum up trade and links with emerging markets outside the EU so that Britain will be in a stronger position to cope if the EU racks down on links with the Square Mile
Mr Hammond said other EU countries viewed financial services as more like ‘logistics or facilities management’.
France has proposed that foreign investment banks based in third countries – including the UK after Brexit – should face tighter controls if they hope to operate in the EU.
But the French Government hit back at suggestions it will use Brexit to crack down on the City of London.
The French finance ministry said: ‘France is keen to work on those areas where there are synergies and an ability to co-ordinate.
‘There is a wish from France overall to ensure there is financial stability across the continent and therefore the rules in place have to ensure that.
‘But the rules are the same for everyone in Europe and are not going to specifically target the UK.’