The City minister has warned publishing the government's position on what the future relationship Britain should have with the European Union when it comes to financial services after Brexit would undermine the exit negotiations.
John Glen, economic secretary to HM Treasury, said this would not prevent the government from representing the interests of the financial services sector "in the strongest terms".
He was responding to questions by Nicky Morgan, chairman of the Treasury select committee, about the publication of a position paper on financial services.
Mr Glen said: "It is important to be cognisant of the fact that the UK's intentions for our future relationship with the European Union form an integral part of our negotiating strategy.
"Negotiations are highly sensitive and we want to secure the best possible outcome, including for our financial services industry. In the first phase of negotiations, it was a pragmatic approach that secured us the announcement of sufficient progress.
"We must carefully consider the timing of any publications that could be used to undermine the UK’s negotiating position."
Mr Glen said the government was working "intensely" with the European authorities on resolving issues relating to financial services market access.
He added the government is also keen to resolve issues on data and citizens' rights, which both affect the British financial services sector.
Mr Glen added: "We have been clear that a priority for the government, and the focus of our current efforts to influence the European Union, is agreeing a swift and legally binding implementation period with the EU by March.
"This aligns with industry’s key priority in the coming months and is essential to avoid unnecessary disruption for businesses."
In response, Ms Morgan said there was need for urgent answers on this issue, saying businesses would need certainty to plan for the future.
She said: "Many firms will begin to activate their Brexit contingency plans at the end of March, but they are still none the wiser about the government's desired end-state for the sector.
"By publishing a position paper on financial services, the government could articulate a clear sense of direction and provide some much-needed clarity.
"Yet, as the economic secretary confirms, the government is refusing to publish such a paper for fear of undermining the UK's negotiating position.
"Nothing undermines a negotiating position more than not having one."
damian.fantato@ft.com
