Tuesday, June 25

PM says Brexit deal must be predictable for the City



Prime Minister Boris Johnson has sought to reassure the City about a post-Brexit trade deal with the European Union, saying it should provide a predictable, transparent and business-friendly environment for financial services firms.

In a written statement to parliament, the PM also said there should be obligations on market access and fair competition.

The statement followed a major speech in London in which Johnson laid out the government’s position on an EU trade deal and warned that Britain would not align with the bloc’s rules.

Such a hard-line position worries many firms in the City, which are keen to keep as much access to EU markets as possible. The pound had fallen 1.4 per cent against the dollar by 3pm to stand at $1.302.

In a sign of the row brewing between the two sides, the EU’s lead negotiator Michel Barnier today said the UK’s access to the single market would depend on how closely it aligns with the bloc’s rules.

In his written statement released after his speech, Johnson sought to calm the City’s nerves.

He said any deal should require both sides to provide a predictable, transparent, and business-friendly environment for financial services firms, ensuring financial stability and providing certainty for both business and regulatory authorities, and with obligations on market access and fair competition.

He added that there should also be enhanced provision for regulatory and supervisory cooperation arrangements with the EU, and for the structured withdrawal of equivalence findings.

The political declaration agreed between the two sides in October said Britain should be able to access the EU’s financial markets using a third-party equivalence system, which would deem Britain’s regulations to be in alignment with the bloc’s.

Yet many banks have warned that equivalence agreements are patchy and unreliable. Catherine McGuiness, policy chair at the City of London Corporation, said: There are some very positive signs in the written statement.

In particular, she welcomed the PM’s plans for more certainty to be introduced to the equivalence arrangements.

Yet McGuiness added that she was not reassured by the Prime Minister’s speech. I remain concerned that there’s not as much focus on services as we’d like to see, yet it’s 80 per cent of the UK economy, absolutely critical, she said.