Rejecting Brexit deal would threaten stability of London, Treasury minister says
Members of parliament who refuse to back Theresa May’s Brexit deal threaten to imperil the stability of the City of London, the economic secretary to the Treasury has warned.
Speaking to a room of bankers and City figures at the FT Banking Summit, John Glen said he hoped MPs recognised that rejecting the agreement would plunge the UK’s financial centre into a protracted period of uncertainty.
“I am confident and hopeful that my colleagues understand that rejecting this deal will take us back to square one,” he said.
“It would prolong the uncertainty and turbulence which threatens the unity of our country and stability of the City.”
The warning comes as the UK government embarks on the final week of a frenzied campaign of domestic diplomacy to try to shore up political support for Mrs May’s deal ahead of a crunch vote in parliament next Tuesday.
Mr Glen insisted that the deal was “good for the City” and that London would enjoy a level of access to the EU that was unparalleled for a so-called third country.
“The relationship will be of greater depth than any other the EU currently has with a third country in financial services,” he said.
The minister’s remarks appeared to promise a deeper partnership than outlined in the political declaration on the UK’s future relationship with the EU, which was published last month.
The declaration said the UK and EU would have “equivalence frameworks” that would allow them to declare that Britain’s regulatory and supervisory regime was “equivalent for relevant purposes.”
However, Mr Glen said the deal “significantly improves on the existing equivalence regime to allow for a continued close relationship, in recognition of the fact that the UK financial services hub is a European asset, as much as a British one.”
Mr Glen also provided a more precise timetable for the agreement of any new equivalence regime, saying that would be completed at least six months before the end of the implementation period to give businesses “critical time and certainty”.
Despite extolling the benefits of close co-operation with the EU, Mr Glen also touted Mrs May’s Brexit deal as a chance for the City to capitalise on “new vistas of opportunity” with the “world’s fastest growing economies”.
And in remarks that might be interpreted as a sign that the UK could adopt a lighter touch regulatory regime after Brexit, he promised “lower compliance costs and more efficient capital structures” for banks.