Britain’s Prime Minister Boris Johnson has professed that the recently secured Brexit trade deal falls short for financial services.
In an interview with the Sunday Telegraph, Mr Johnson admitted that the Brexit trade deal “perhaps does not go as far as we would like” in determining Britain’s market access to the EU after 1 January 2021.
From 1 January, financial firms will not be granted automatic access to EU markets.
Britain’s financial firms’ future market access rights will depend on how closely Britain’s standards align with the EU’s.
“A series of further clarifications will be needed [from Britain], in particular regarding how the UK will diverge from EU frameworks after 31 December, how it will use its supervisory discretion regarding EU firms and how the UK’s temporary regimes will affect EU firms,” the European Commission said in a Q&A.
“For these reasons, the Commission cannot finalise its assessment . . . and therefore will not take decisions at this point in time. The assessments will continue.”
Britain and the EU aim to sign a Memorandum of Understanding by March 2021 detailing a framework for the regulatory co-operation on financial services.
Chancellor Rishi Sunak has nevertheless lauded the deal as “an enormously unifying moment for our country.”
“There is a stable, co-operative framework, mentioned in the deal which I think will give people that reassurance that we will remain in close dialogue with our European partners when it comes to things like equivalence decisions, for example,” said Mr Sunak told the BBC.
The trade deal, agreed upon just 5 days before its deadline, currently allows Britain and the EU to trade without tariffs or quotas.
The EU and Britain will “continue co-operating in all areas of mutual interest, including things like climate change, energy, security and transport,” said European Commission president Ursula Von der Leyen.
However Labour’s shadow chancellor Anneliese Dodds has characterised the trade deal as a “thin deal.”
“It’s not the deal that the government promised and there are large areas of our economy, for example financial services – that employs 1 in 14 people in our country – where there aren’t clear elements within this deal.
“Much more work will need to be done very speedily by the Conservative government in order to ensure that we keep jobs in the UK as a result of this deal and don’t lose even more.”
The deal will be voted on in Parliament on 30 December.
Ms Dodds has confirmed that Labour will support the deal when it goes to a vote. SNP Westminster leader Ian Blackford has confirmed it will vote against the deal.