Banking jobs treated with contempt by Brexit deal
Looking at the unwieldy 500 page+ document from the British government and the European Union on the future of Britain's relationship with the EU, you would not know that the UK's financial services industry generates around £30bn in taxes and employs 1.1 million people.
Graham Bishop, a former banker and consultant who has advised the European Union and the British government on financial services issues, points out that the document devotes as much time to financial services as to the British fishing industry, which employs just 12,000 people in the UK.
"There are three short paragraphs on financial services in the section on Britain's future relationship with Europe, and two thick paragraphs on fishing," says Bishop. "I find it quite inexplicable."
Bishop accuses the government of "not batting" on the City's behalf in negotiating the agreement with the EU, and of the City on misplaying its hand by trying to negotiate a system of mutual recognition for financial services regulations which "was never a runner." Instead, the document - which may be doomed anyway if Theresa May is unable to achieve its backing - commits the UK to limited equivalence arrangements that bind the UK into emulating EU financial services rules that could change at any time.
"Equivalence is and always will be weighted in favour of the EU," said William Wright, founder of think-tank New Financial in a tweet. Equivalence is not a deal, he added: "it's what has been on offer since June 24th 2016 to any country in the world." Plus, Wright says the EU is, "heading in a direction on the other side of Brexit that the City won't want to be tied to."
"There should have been a push from the start to expand equivalence across financial services and to get it enhanced with longer notice periods and made into less of a political decision," says Bishop.
The trade Association UK Finance welcomed the deal, saying that it shows that, "important progress has been made in defining the nature of the UK’s long-term relationship with the EU." However, Bishop suggests the deal has been hampered by the unpopularity of the banking sector in the UK: "There may be a post-crisis hatred of bankers in the population as a whole, but it certainly shouldn't be the case for government, which appreciates the FX and tax revenues," he says.
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