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Brexit: Theresa May 'considering paying billions of pounds to access single market'

A report suggests that Theresa May's Cabinet is discussing the move which would amount to a 'softer' Brexit

Zlata Rodionova

Monday 17 October 2016 10:09 BST

The FCA’s review could be followed by a full-scale investigation (Getty)

Theresa May's government is reportedly considering continuing paying billions of pounds into the EU budget after the UK leaves the EU to maintain single market access for the City of London.

Prime Minister Theresa May's recent rhetoric sent sterling to new lows and has sparked fears among traders and investors that the UK is heading for a hard Brexit, meaning the UK would leave the single market by 2019. The pound has come under renewed pressure trading below $1.22 on Monday after falling to its lowest level on record against a basket of currencies last week.

However, a new report by the Financial Times suggests the Government has not ruled out making future payments to the EU to secure privileged access to the single market for City firms to continue trading across the continent.

Several ministers have revealed that the Cabinet is considering paying billions of pounds into the EU budget, according to the report.

“We would have to be careful how we explained it,” one of the ministers told the paper.

“But Theresa has been very careful not to rule it out,” another senior Conservative minister added.

The report is likely to frustrate Eurosceptics within the Conservative Party who would prefer to see a so-called "hard Brexit" in which Britain would have greater control over migration.

It came after Theresa May met with Nissan’s chief executive Carlos Ghosn on Friday, in an attempt to assure him that trading conditions for the company's British car plant in Sunderland would not change after Brexit.The move was seen as the first suggestion that the Government could pick certain sectors to shield from the impact of leaving the EU.

What experts have said about Brexit

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1/11What experts have said about Brexit

What experts have said about Brexit

Chancellor of the Exchequer Philip Hammond

The Chancellor claims London can still be a world financial hub despite Brexit “One of Britain’s great strengths is the ability to offer and aggregate all of the services the global financial services industry needs” “This has not changed as a result of the EU referendum and I will do everything I can to ensure the City of London retains its position as the world’s leading international financial centre.”

Reuters

What experts have said about Brexit

Yanis Varoufakis

Greece's former finance minister compared the UK relations with the EU bloc with a well-known song by the Eagles: “You can check out any time you like, as the Hotel California song says, but you can't really leave. The proof is Theresa May has not even dared to trigger Article 50. It's like Harrison Ford going into Indiana Jones' castle and the path behind him fragmenting. You can get in, but getting out is not at all clear”

Getty Images

What experts have said about Brexit

Michael O’Leary

Ryanair boss says UK will be ‘screwed’ by EU in Brexit trade deals: “I have no faith in the politicians in London going on about how ‘the world will want to trade with us’. The world will want to screw you – that's what happens in trade talks,” he said. “They have no interest in giving the UK a deal on trade”

Getty

What experts have said about Brexit

Tim Martin

JD Wetherspoon's chairman has said claims that the UK would see serious economic consequences from a Brexit vote were "lurid" and wrong: “We were told it would be Armageddon from the OECD, from the IMF, David Cameron, the chancellor and President Obama who were predicting locusts in the fields and tidal waves in the North Sea"

PA

What experts have said about Brexit

Mark Carney

Governor of Bank of England is 'serene' about Bank of England's Brexit stance: “I am absolutely serene about the … judgments made both by the MPC and the FPC”

Reuters

What experts have said about Brexit

Christine Lagarde

IMF chief urges quick Brexit to reduce economic uncertainty: “We want to see clarity sooner rather than later because we think that a lack of clarity feeds uncertainty, which itself undermines investment appetites and decision making”

Getty Images

What experts have said about Brexit

Inga Beale

Lloyd’s chief executive says Brexit is a major issue: "Clearly the UK's referendum on its EU membership is a major issue for us to deal with and we are now focusing our attention on having in place the plans that will ensure Lloyd's continues trading across Europe”

EPA

What experts have said about Brexit

Colm Kelleher

President of US bank Morgan Stanley says City of London ‘will suffer’ as result of the EU referendum: “I do believe, and I said prior to the referendum, that the City of London will suffer as result of Brexit. The issue is how much”

What experts have said about Brexit

Richard Branson

Virgin founder believes we've lost a THIRD of our value because of Brexit and cancelled a deal worth 3,000 jobs: We're not any worse than anybody else, but I suspect we've lost a third of our value which is dreadful for people in the workplace.' He continued: "We were about to do a very big deal, we cancelled that deal, that would have involved 3,000 jobs, and that’s happening all over the country"

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What experts have said about Brexit

Barack Obama

US President believes Britain was wrong to vote to leave the EU: "It is absolutely true that I believed pre-Brexit vote and continue to believe post-Brexit vote that the world benefited enormously from the United Kingdom's participation in the EU. We are fully supportive of a process that is as little disruptive as possible so that people around the world can continue to benefit from economic growth"

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What experts have said about Brexit

Kristin Forbes

American economist and an external member of the Monetary Policy Committee of the Bank of England argues that the economy had been “less stormy than many expected” following the shock referendum result: “For now…the economy is experiencing some chop, but no tsunami. The adverse winds could quickly pick up – and merit a stronger policy response. But recently they have shifted to a more favourable direction”

Getty

On Monday, Cabinet minister Jeremy Hunt tried to play down talk of a cabinet split over Brexit, claiming reports of a rift simply reflect “lively debates” within government.

Hunt spoke out following claims that Chancellor Philip Hammond had angered cabinet Brexit supporters by failing to be helpful enough in pursuing the UK's withdrawal from the European Union.

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