Nicky Morgan slams City minister for refusing to commit to set out financial services Brexit plan

Jasper Jolly
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The Treasury has not published a position paper on financial services after Brexit (Source: Getty)

Former Cabinet minister Nicky Morgan has accused the government of undermining its own Brexit negotiations after the City minister refused to commit to publishing a position paper on financial services after the UK leaves the EU.

John Glen, the economic secretary to the Treasury, who holds the City brief, wrote in a letter to Morgan last week that such a paper "could be used to undermine the UK’s negotiating position" if published too early.

However, Morgan, who heads the influential Treasury Select Committee, today rejected that argument.

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“Nothing undermines a negotiating position more than not having one," she said. "Financial services firms will be seriously concerned at the chronic state of uncertainty. The government should publish its position paper on the future of financial services immediately.”

Firms in the City have grown frustrated by the perceived lack of direction from the government, which is yet to agree a position on fundamental issues such as whether to aim to be in a customs union with the EU after Brexit.

Regulators and bankers have warned that firms are already triggering contingency plans, with a transitional arrangement yet to be agreed to secure trade from March 2019 onwards. Meanwhile, the lack of a clear direction from the government on its desire for the future trading relationship has stopped some firms from long-term investments.

Read more: Brexit talks need direction of travel by June or the banks will leave City

In the letter to Morgan, Glen pointed to the government's as yet unrealised commitment to secure a transitional deal, as well as agreements on data flows and EU citizens' rights in the UK after Brexit, as evidence the government was acting in the interests of the City.

Glen said the government had pushed the City's interests "in the strongest terms in our private discussions with the EU".

Morgan said the government is failing to "articulate a clear sense of direction and provide some much-needed clarity" for City firms.

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