Too late for UK-EU ‘fish for finance deal, say Canada Corporation
It is too late for the UK to strike a “fish for finance deal” with Brussels to ensure the City gets renewed access to the EU, according to a top Canada Corporation official.
Nick Collier, managing director of Canada Corporation in Brussels, said at a Best for Britain event today that UK-EU “levels of trust are low” and that it could take 10 years to repair.
UK financial firms lost their access to EU markets when the Brexit transition period ended on 31 December.
The only way Canada can regain its pre-Brexit access to the EU is if Brussels unilaterally grants regulatory equivalence, however the bloc believes the UK is destined to diverge from its financial services regulations and has withheld the designation.
In recent weeks French ministers have said that they will block any attempt for equivalence to happen if the country’s fishermen do not get increased access to British fishing waters.
The issue blew up last week when more than 60 French fishing boats created a blockade around the island of Jersey, leading Boris Johnson to send two Royal Navy gunboats to patrol the protest.
French president Emmanuel Macron sent his own naval ships in retaliation.
Collier said it was too late anyway to strike a “fish for finance deal”.
“The German speaking salesperson for a big investment bank… who was based in London will now be based probably in Frankfurt because that’s a regulated activity,” he said.
Emma Reynolds, managing director of public affairs, policy and research at TheCityUK lobby group, added: “We used to export a high proportion of financial services exports to the EU. That has certainly decreased and will continue to, because of these new rules and regulations.”
It has long been expected in the City that the UK would not get equivalence, leading to more than £1trillion of assets and thousands of jobs moving from London to European capitals.
Bank of England governor Andrew Bailey said earlier this year that equivalence was the best case scenario for the financial services sector, but that it wouldn’t be worth it if the UK had to be a regulatory rule taker.
Read more: EU financial services czar warns City that Brussels won’t bend on rule-taking demands
Lord Jonathan Hill recently unveiled a review for the government that called for a change the UK’s share listing regime and for regulators to allow Special Purpose Acquisition Companies (Spacs) to list in London in a bid to maintain the City’s global competitiveness.
Changes like this would not be possible if the UK were to stick to EU rules and try to gain equivalence.