LONDON: Finance minister Philip Hammond was speaking to lawmakers from the lower house of parliament on Wednesday.
Below is a selection of his comments:
ON KEEPING OPTIONS ON THE TABLE: "Those that are undermining the effort are those that are seeking to close down that negotiating space, seeking to arrive at hard decisions that we don't need to make at this stage. Keeping as many options open as possible is the key to the strongest possible negotiating hand." ON THE SINGLE MARKET: "The key issue is whether we have free access to our goods and services for our companies to operate in and trade with the European single market."
ON THE LINK BETWEEN SINGLE MARKET AND MIGRATION: "The central trade-off would be around the European Union's negotiating position, and it is their clearly stated negotiating position, that access for goods and services to the market is linked inextricably, in the view of their opening position, to freedom of movement. Now we can choose to ignore that, we can seek to move them away from it, but the fact is that the European Union has been pretty clear and pretty consistent in setting that out as their opening stance."
ON UNCERTAINTY, POSSIBLE TRANSITION PHASE: "You're quite right to identify the fact that uncertainty is the big challenge in the next phase of this process. It's a challenge to our economy, there will be a period inevitably of uncertainty until we know the outcome of the negotiations.
There will then follow a different period of structural adjustment, where we have certainty and we have to change the way our economy works to respond to that certainty.
You're also absolutely right to say that one of the mitigations that the [financial services] industry is proposing, is some kind of transitional period that gives them longer to adjust to whatever the outcome of the negotiations is. We understand that ask from the financial services industry. As the prime minister has said many times we're not going to give a running commentary on how we conduct the negotiation."
FINANCIAL SERVICES AS A PRIORITY: "The reality is that financial services remains our single largest sector, it is responsible for a very large number of jobs straight across the United Kingdom, it's not London-based industry, and it plays a very important role in our external current account balance as you rightly say, providing one of the few bright spots in terms of the positive current balance with the rest of the European Union.
The industry knows that we regard it as extremely important, the industry knows that we understand that it has a particular set of challenges as we go into this period of negotiation with the European Union.
And I hope the industry knows, it certainly should know, that helping to address these challenges and taking account of these challenges will be a very high priority for the government."
ON PASSPORTING FOR FINANCIAL SERVICES FIRMS: "Passporting is of course important, and the retention of passporting would mean that the problem went away as far as almost all financial services businesses were concerned, and of course from the point of view of the financial services sector that would be the ideal outcome, but in the discussions I've had with the financial services sector, and I've spent a lot of time with companies here, European and US providers, I think they are also realistic and are looking at other options beyond passporting to protect their interests."
ON PRIME MINISTER MAY'S CRITICISMS OF THE SIDE-EFFECTS OF LOW INTEREST RATES: "My understanding is that what the prime minister was trying to say is that we recognise that monetary policy, which is an important tool of macroeconomic policy, has a distributional impact and to the extent that the government believes that distributional impact needs to be addressed or corrected, we also have tools available to do that."
"There will be no change in monetary policy. Monetary policy is independently determined, that will continue to be the case. The Monetary Policy Committee will continue to make decisions on interest rates and recommendations on unconventional monetary policy."
ON A FUTURE UK-EU DEAL: "We are clear that this will be a negotiation between two sovereign entities: the United Kingdom and the European Union, and that we should not feel constrained by the existing structures and existing arrangements. We should be able to talk about the way in which it would be mutually beneficial to construct future collaborative arrangements between the European Union and the United Kingdom in a way that benefits both."
ON WHETHER BRITAIN WOULD STAY IN CUSTOMS UNION: "We haven't made any decision on that yet."
ON WHEN TRADE TALKS WITH OTHER COUNTRIES CAN START: "We are not able to enter into negotiations with third parties at the present time, because of the constraints of our membership of the European Union.
Certainly until such time as the Article 50 notice is served, it would not be appropriate to enter into any substantive negotiation with any third parties."
ON HOW QUICKLY TRADE DEALS COULD BE STRUCK: "It's become the convention to believe that it takes years to negotiate trade deals, and certainly there have been some very long drawn-out multilateral trade deals.
I think there is a reasonable argument, which my colleague the secretary of state for international trade would advance, that negotiating a straightforward bilateral trade deal ought to be a great deal simpler than negotiating a trade deal between a third country and a bloc of 28 countries."
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