Sadiq Khan will today underline the City of London’s importance to the UK economy at day-three of the World Economic forum, while calling for the government to broker an EU financial services deal.
The mayor of London is also expected to outline a three point post-Covid “London recovery plan”, which will include “restoring confidence in the city, minimising the impact on communities and building back better the city’s economy and society”.
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Khan will tell the virtual conference that London’s “history in financial services, its geographic position, language [and] appeal to global talent…equips us to lead the world in banking, insurance, trading and related services” and that “the UK government should be working to make the most of these national assets in a post-pandemic, post-Brexit world”.
The UK’s financial services sector lost its pre-Brexit access to EU financial markets on 1 January, with firms now having to either set up bases in Europe or negotiate a patchwork of regulations from individual countries.
The only way the City of London can regain its pre-Brexit access to the EU is if Brussels grants regulatory equivalence across 40 areas, however Brussels believes the UK is destined to diverge from its financial services regulations and has withheld the designation.
Khan will say at Davos today that Boris Johnson must push to get the City of London greater access to the EU’s financial markets.
He is expected to say: “The initial trade deal between the UK and EU falls short of what’s best for London, the UK and its economy, while Covid has had a devastating impact on businesses and livelihoods.”
The UK’s former financial services commissioner to the EU Lord Jonathan Hill told the Financial Times today that equivalence will not be granted by Brussels this year and that the EU “would “not do us any favours”.
He said: “Given that their strategy is to build up the EU, why on earth would they?”