Shadow chancellor Anneliese Dodds has called for the UK to be “more ambitious” in its post-Brexit talks with the EU on future financial services regulation.
Dodds said today that the government “seems to be trying to manage expectations down” about the Memorandum of Understanding talks and that getting equivalence from the EU should be the goal of the talks.
The EU has refused to grant equivalence to the UK for financial services, meaning that the City has lost its pre-Brexit EU-wide access.
The EU has asked for more information from the Treasury before it makes a decision whether to grant equivalence, which is a designation only given if Brussels thinks UK financial services regulations will stay closely aligned to the EU’s.
Financial firms have also lost previous passporting rights that made it easier to operate throughout the bloc post-Brexit.
The UK is currently holding Memorandum of Understanding talks with the EU on financial services to ensure there is regulatory cooperation on future decisions.
These talks are not expected to deliver greater EU access for City firms, however Dodds said that should be the aim.
“The government seems to be trying to manage expectations down from where we should be as a country,” she said.
“Having access to the financial and related services in London and indeed across the UK – that’s a tremendous benefit of business and individuals based in the EU 27.
“We’ve shifted from a situation where the UK government said it was going to seek passporting for our services…then they resiled from that to saying let’s makes sure we have equivalence and now we’re bumping along the bottom.
“I think we’ve got to be ambitious here and break beyond that zero sum mentality and emphasise having trade in the financial and related services industry.”
Bank of England governor Andrew Bailey last week warned that the EU was looking to siphon business away from the City of London and that it would not grant equivalence to the UK.
He has also said in the past that he would rather the UK makes its own decisions on financial services regulation than be locked into EU rules and get equivalence.