Theresa May vows UK will not withdraw from global role after Brexit

Theresa May told political and business leaders on Thursday that the UK would “step up to a new leadership role” in the global economy once it leaves the EU, attempting to reassure a jittery international community that Brexit would not mean a retreat from the world.

In a speech at the annual World Economic Forum in Davos, the UK prime minister said Britain was by instinct a “great global trading nation” and rather than turning its back on globalisation, leaving the EU would allow the UK to “build a truly global Britain” with confidence.

Mrs May’s comments came as a growing number of business leaders and international bank executives at Davos have voiced concerns about her announcement on Tuesday that Britain would withdraw from the EU’s single market after Brexit. This would hinder their ability to operate global businesses from UK-based headquarters, they said.

Mrs May acknowledged on Thursday that many in the EU saw Britain’s actions as a rejection of Europe. But her efforts to reassure them and align herself with the Davos elite received a mixed reaction as she delivered her speech to a subdued main congress hall.

Wolfgang Schäuble, the German finance minister, cast doubt on how clean a break Britain would make from the EU, noting: “We have a German saying: ‘You never eat as hot as it is cooked.’ That is my general feeling on all this.”

He added that Germany did not want to “punish the UK”. Arguing that the decision to leave the EU was against Britain’s interests, he added that Berlin sought to “limit the impact” of the move.

“I am not a friend of too much rhetoric, and before you make negotiations you show your muscles,” Mr Schäuble said. “But we know we have to find solutions . . . We will do our very best to have good negotiations, but of course there will be some consequences.”

Mr Schäuble also played down the possibility of Britain slashing corporate tax rates to keep business humming after it leaves the EU. Although Mrs May hinted at the option in her speech on Tuesday, the German finance minister pointed to UK support for initiatives to reject competitive tax cuts in the Group of 20.

“The UK is always very cognisant of global agreements, so I have no concerns,” he said.

Philip Hammond, UK chancellor, also played down his previous warning that the UK could become a tax haven, saying the country already had “competitive” tax rates. But he maintained that Britain would respond if it was not offered “a comprehensive trading relationship with the EU” that included goods and services. He added that the UK financial services sector had to be protected and there would be no sudden changes to rules.

In her speech, Mrs May called for businesses to adopt a new approach that would ensure they operated on a level playing field, an approach she dubbed the “shared society”.

“I am determined to stand up for free markets, free trade and globalisation, but also show how these forces can work for everyone,” she said.

But the Dutch finance minister, Jeroen Dijsselbloem, who chairs the meetings of eurozone finance ministers, told NRC Handelsblad newspaper this week that he expected Mrs May’s Brexit plans to lead to “massive unemployment” by 2037.

“Let’s speak to each other again in 20 years, and then England will be back to where it was in the seventies,” he said. “Totally outdated, massive unemployment, totally impoverished.”

British confidence that it will secure a favourable deal has been in contrast to such stark statements from EU representatives.

Senior bankers in Davos from HSBC, UBS and JPMorgan have also said they will have to move thousands of jobs from London once Britain leaves the EU. Car companies, including Toyota, have told their UK workforces that they will need to improve competitiveness to survive in the UK.

Manfred Weber, head of the centre-right bloc of Members of the European Parliament, made a direct threat to London’s financial centre this week. “We will not accept that the euro will be managed largely in the City of London, if the UK belongs no longer to the EU,” he told MEPs.