Theresa May looks to reveal more Brexit detail within weeks

Theresa May is likely to announce details of her Brexit plans for financial services and other key sectors of the UK economy within weeks, to reassure business leaders and MPs that her EU exit strategy is taking shape.

Last week’s High Court ruling against the government’s plan to trigger Brexit without a parliamentary vote put new pressure on the prime minister to reveal her favoured “bespoke” deal, ahead of the launch of formal talks in Brussels that will begin after the UK has triggered the two-year Article 50 exit process.

The prime minister had already been planning to map out her broad objectives — including for sensitive parts of the economy like the City of London — before Christmas, ahead of triggering Article 50 in spring of 2017.

That plan is still currently on track, according to Mrs May’s allies, but officials preparing the Brexit negotiating strategy said the government’s appeal to the Supreme Court in December could disrupt the timetable.

David Davis, Brexit secretary, told MPs on Monday he was “confident” the government would win its appeal at the Supreme Court in December and would still be able to start negotiations in Brussels by the end of next March.

Different options for giving more details on the Brexit plan are being discussed in Number 10, with one adviser saying: “There may be some merit in saying a bit more before Christmas.” There would be a focus on broad objectives, rather than detail.

Mr Davis and Philip Hammond, chancellor, are said by leading bankers to have settled differences and are working together to defend the City of London’s European interests.

The task is seen by some in the City as urgent. Anthony Browne, head of the British Bankers’ Association, said last month that banks could start moving operations out of London within weeks.

“Their hands are quivering over the relocate button,” he said. “Many smaller banks plan to start relocations before Christmas; bigger banks are expected to start in the first quarter of next year.”

The outline of the government’s City strategy is already taking shape, based on the starting point that Britain will leave the single market and that banks and insurers would lose the “passporting” rights that allow them to offer their services across the EU.

William Hague, the former foreign secretary, said last week that some in the City would prefer not to stay in the single market after Brexit, because Britain would then become a “rule-taker” from Brussels with no input to those rules.

Britain will instead seek a “hybrid” deal that would go beyond the bloc’s current “equivalence” rules, which extend limited rights to non-EU jurisdictions such as the US and Switzerland where regulation is deemed equivalent.

Ministers say that the current equivalence rules would not work for Britain because they are enforced by the European Commission and can be revoked at short notice at the discretion of Brussels.

“It would be tough for London to be a global hub if it could be disenfranchised at 30 days’ notice,” said one minister. Britain would seek a deal that would include a dispute settlement mechanism that operates outside EU institutions.

However, it may be difficult to make this happen. François Hollande, French president, made it clear immediately after the Brexit vote that he saw the decision as a chance to bring euro-related business from the City to Paris.

The idea of sidelining EU institutions such as the commission and the European Court of Justice may be a tough sell in Brussels, not least because a review is already under way on streamlining and strengthening the existing equivalence rules.

The Financial Times revealed on Monday that they could be tightened before Brexit, with one senior French official who had discussed the question with the commission saying: “The equivalence rules were never envisioned for the City.”

Iain Anderson, executive chairman of financial consultancy Cicero, said: “We are increasingly seeing a real appetite from the government to set out the framework for their negotiating ambitions.” Aides to Mrs May confirmed that early publication of some negotiating objectives was under consideration.