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LONDON, Oct 19 (Reuters) - Finance minister Philip Hammondsought to reassure Britain's powerful banking sector that hewould protect its access to skilled labour and the EuropeanUnion's single market once the country leaves the bloc.
Hammond told lawmakers that the sector's interests would be "a very high priority" for the government when it tries to findbalance the need for continued access to EU markets with thecall from many voters for tighter control on migration.
"I cannot conceive of any circumstances in which we would beusing those migration controls to prevent banks, companiesmoving highly qualified highly skilled people between differentparts of their businesses," he said.
Britain's financial services industry contributes around 12percent of Britain's economic output.
Some large banks who use London to run their EU operationshave said they could start shifting staff to Europe as early as2017 if they are not sure whether Britain will retain access tothe single market or not.
Asked whether he thought it was possible to retain the'passporting' rights that allow firms based in Britain to sellfinancial services across the EU, Hammond said it was notimpossible but the government was considering other options too.
But he poured cold water on the idea of relying solely upona regulatory 'equivalence' status with the EU that would allowfinancial services firms in Britain to operate in the bloc. Hesaid Britain required a deal on access that would meet itsparticular needs.
"Equivalence is one of the routes being discussed by playersin the financial services sector but of course it has somechallenges around it," he said.
"Not least that the decision on granting equivalence andcontinuing equivalence would lie unilaterally with the (European) Commission. It would not be a stable basis on whichto plan long term." (Reporting by William James; writing by William Schomberg andAndrew MacAskill; Editing by Richard Balmforth)
