Sunak foresees financial alignment outside EU

The UK is considering aligning financial services regulation with major economic powers outside the EU when the Brexit transition ends on December 31, according to Chancellor of the Exchequer Rishi Sunak.

David Sapsted

6 October 2020

With few signs of a breakthrough in talks between London and Brussels over a trade deal, Mr Sunak told a fringe meeting of the Conservative Party conference, which is being held remotely this week, that Brexit offered the UK "a chance to do things differently".His remarks, however, coincided with the publication of a survey by the Chartered Institute for Securities and Investment (CISI) showing that the overwhelming majority of those working in financial services believed a no-deal Brexit would have a negative impact on jobs in the sector.British firms remain anxious to discover if they will still have access to European markets after December 31 and Valdis Dombrovskis, European Commissioner for financial services, has suggested the UK might have to negotiate 'equivalence' arrangements with each of the EU27 nations.But, according to a report in City A.M., Mr Sunak told the fringe meeting that the UK might choose, instead, to align its regulations with financial centres in New York, Tokyo and Hong Kong.

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"We’ve said we’ll have a review of our regulatory framework. We need to get that balance right between regulators, parliament the Treasury, make sure there’s accountability but also flexibility to respond," he said.“Not being inside the EU more generally gives us a chance to do things differently. The world comes to London to trade, to buy, to sell, to raise capital, to invest. I want that to remain the case, it’s a source of pride and strength for our economy.“Things have to be slightly different now we’re outside the EU - and they will be.”Meanwhile, the CISI, the chartered professional body for those working in capital markets, wealth management and financial planning, questioned more than a thousand people working in the sector in its survey undertaken between July 23-Deptember 23.In response to the question: 'In the event of a no-deal Brexit, what impact do you think this will have on jobs in the UK financial services sector?', 86 per cent felt there would be a negative impact. Only eight per cent said the impact would be neutral and six per cent felt it would be positive.Simon Culhane, chief executive of the CISI, said: “This survey demonstrates a real belief amongst our members that the financial sector is seriously going to suffer in a post-Brexit world."For the UK, this should ring alarm bells as one in 14 UK-based workers (more than 2.3 million people) are employed in financial and related professional services, with two-thirds outside London. So the potential for a no-deal Brexit to cause damage to jobs in the sector is huge.”