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Financial Services

Question for Treasury

UIN 132995, tabled on 30 December 2020

To ask the Chancellor of the Exchequer, what assessment he has made of the effect of the UK-EU Trade and Cooperation Agreement on (a) jobs, (b) investment and (c) profitability in the financial services sector.

Answered on

12 January 2021

The UK-EU Trade and Cooperation Agreement gives legal certainty for financial services firms, with commitments on market access and fair treatment. The Agreement supports firms providing cross-border financial services. Beneficial provisions ensure UK service suppliers travelling to the EU for short trips do not face undue barriers like work permits, and UK business visitors are permitted to stay in the EU for 90 days in any 180-day period. We have also agreed commitments on visa facilitation for professionals engaged in cross-border trade.

It is the first free trade agreement the EU has ever reached based on zero tariffs and zero quotas, which will provide benefits for jobs, investment and profitability in the financial services sector. The Agreement also establishes a stable foundation for us to develop a constructive and engaged relationship with the EU on financial services, as sovereign equals. Importantly we have also agreed with the EU that we will establish an MoU setting out the parameters for our regulatory cooperation.

The government has also taken further action which complements the UK-EU Trade and Cooperation Agreement and will facilitate the retention of jobs, investment in, and profitability of the financial services sector. To promote openness and provide clarity and stability for industry, the Government announced multiple equivalence decisions for EEA Member States where it made sense for the UK to do so.

The UK has long been a global hub, leader and pioneer in financial services and the Government has an ambitious strategy to strengthen our world-leading financial centre now that we have left the EU. This is centred upon building long-lasting financial partnerships around the world, maintaining the high regulatory standards that make the UK an attractive place to do business, and being at the forefront of innovation so we can create and seize opportunities in the markets of the future.

On 9 November, the Chancellor also set out plans to bolster the dynamism, openness and competitiveness of the sector – including issuing the UK’s first ever Sovereign Green Bond, becoming the first country in the world to make TCFD-aligned disclosures mandatory, reviewing the UK’s listings regime to attract the most innovative firms, and leading the global conversation on new technologies like stablecoins and Central Bank Digital Currencies. The announcements have been praised by industry for being supportive, pragmatic and positive.

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