London: Trying to reassure bankers and multinational companies that Britain will be open for business even as it plans a sharp break with the European Union, British Prime Minister Theresa May braved the elitist chill of the World Economic Forum on Thursday to argue that Britain is committed to free trade and globalisation.
But she also scolded the business and government leaders at the gathering in Davos, Switzerland, for being complacent about inequality and helping to feed a populist reaction from those left behind.
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Theresa May Brexit speech reveals UK will leave single market
Britain will leave the European Union single market, Prime Minister Theresa May announced in a wide-ranging Brexit speech.
"Mainstream political and business leaders have failed to comprehend their legitimate concerns for too long," Mrs May said. And she urged businesses to play by the same rules as everyone else, especially on paying taxes.
"If we are to make the case for free markets, free trade and globalisation, as we must, those of us who believe in them must face up to and respond to the concerns people have," Mrs May said.
Her defence of free trade was slightly jarring coming after Britain's decision to quit the largest free trade grouping on earth, the European Union, judging that control over immigration and complete sovereignty mattered more.
She also spoke at a time when free-trade deals are increasingly unpopular, particularly among the people she was accusing the crowd in Davos of ignoring, and with US President-elect Donald Trump talking of protectionism and criticising free trade pacts.
But with big multinational banks and companies already announcing that they will reduce their staffing in London because of the vote to leave the EU, Mrs May was eager to reassure them that Britain would emerge bigger and better from Brexit.
Conceding that the road ahead will be "uncertain at times", she said that the British vote to leave was not about isolationism but a chance to become "even more global and internationalist in action and spirit, too".
![British Prime Minister Theresa May speaks at the annual meeting of the World Economic Forum in Davos.](/web/20170120095902im_/http://www.brisbanetimes.com.au/content/dam/images/g/t/v/1/2/j/image.related.articleLeadwide.620x349.gtv9nk.png/1484889994440.jpg)
Britain wants to negotiate trade deals with "old friends" and "new allies", she said, adding that tentative discussions have begun with Australia, India and New Zealand, and that China, Brazil and the Persian Gulf states have expressed interest in striking trade deals.
Britain is especially keen to do a deal with Washington, and Mr Trump has said he is eager to start. But until Britain formally leaves the EU - March 2019 at the earliest - it can only discuss such deals, not sign them. And trade deals normally take many years to negotiate, especially if they are also supposed to cover services and financial services, which has been one of Britain's strengths.
![Attendees walk down the staircase between sessions during the World Economic Forum in Davos.](/web/20170120095902im_/http://www.brisbanetimes.com.au/content/dam/images/g/t/v/l/t/j/image.related.articleLeadwide.620x349.gtv9nk.png/1484889994440.jpg)
Though Mrs May's plans for a clean break with the EU have received an enthusiastic reception from her Conservative Party colleagues and the right-wing British news media, the reaction from businesses and other European nations has been less positive.
Big international banks that have long threatened to relocate staff because of the vote to leave the bloc have begun to make plans to do so. HSBC and UBS have warned they could move around 1000 jobs out of London. JPMorgan Chase has said that it may have to move 4000 staff members.
![Theresa May enters the room through a curtain to deliver her speech.](/web/20170120095902im_/http://www.brisbanetimes.com.au/content/dam/images/g/t/v/1/2/p/image.related.articleLeadwide.620x349.gtv9nk.png/1484889994440.jpg)
The German newspaper Handelsblatt reported that Goldman Sachs is considering halving its London workforce to 3000 and moving key operations to New York and continental Europe, but the bank has not confirmed that.
Andrew Parmley, lord mayor of London and head of the City of London Corporation, which is home to much of the city's financial services sector, said he was "not surprised" by the looming departures and said "it is inevitable that people would be speculating about what to do next".
![Multinational banks and firms are already announcing that they will reduce staffing in London because of the vote to ...](/web/20170120095902im_/http://www.brisbanetimes.com.au/content/dam/images/g/t/u/6/i/f/image.related.articleLeadwide.620x349.gtv9nk.png/1484889994440.jpg)
He argued that some of the thousands of jobs that are likely to leave London may return if Mrs May can negotiate a good deal for financial services.
"I take great comfort from the fact that people are saying, 'We are back if we get the deal'," he said.
![The European Parliament's negotiator for Brexit said it will be "a sad and exhausting process".](/web/20170120095902im_/http://www.brisbanetimes.com.au/content/dam/images/g/t/t/d/g/l/image.related.articleLeadwide.620x349.gtv9nk.png/1484892608157.jpg)
But most banks and companies regard Britain's departure as a cost, not a source of profit, and want to minimise or eliminate the expense of being outside the EU.
In the meantime, other countries in the bloc, like France, Germany and Ireland, are trying to lure financial services firms, and Ireland's central bank has had more than 100 inquiries from financial firms considering moving from Britain, according to Irish Finance Minister Michael Noonan.
Nor is the anxiety confined to banks. Takeshi Uchiyamada, chairman of Toyota, told the Financial Times that his company was "going to consider, together with the suppliers, how our company can survive" in Britain.
Initial European reaction was skeptical to Mrs May's plans for a clean break and a simultaneous negotiation with Brussels for a comprehensive free-trade agreement. Jean-Claude Juncker, president of the European Commission, the executive of the 28-nation bloc, predicted that negotiations on Britain's departure would be "very, very, very difficult".
Guy Verhofstadt, the European Parliament's negotiator for Britain's exit, wrote in Britain's Guardian newspaper that "it is an illusion to suggest that the UK will be permitted to leave the EU, but then be free to opt back in to the best parts of the European project, for example by asking for zero tariffs from the single market without accepting the obligations that come with it". Leaving, he said, will be "a sad and exhausting process".
European officials seem to agree that Britain should not get a better deal by leaving the bloc, and some think Britain should be seen to suffer, to dissuade others from leaving.
The atmosphere was hardly improved by a characteristic intervention from British Foreign Secretary Boris Johnson, who argued that if French President Francois Hollande "wants to administer punishment beatings to anybody who chooses to escape, rather in the manner of some World War II movie, then I don't think that is the way forward".
Downing Street quickly suggested that the voluble Mr Johnson was not really comparing Mr Hollande to a Nazi camp guard, though Mrs May on Thursday appeared to be struggling to reassure her continental counterparts.
German Finance Minister Wolfgang Schauble warned Britain against carrying out its threat to cut corporate taxes if it finds itself locked out of the single market. At Davos, Dr Schauble said that countries in the G20 had promised not to undermine one another in this way.
"That has been agreed," he said, adding that, to be taken seriously, countries "have to stick to what was agreed".
New York Times