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14 November 2018

Future Relationship Declaration: disaster for the City of London

The Political Declaration on the Future Relationship is particularly vague on financial services – but is likely to be devastating for the City of London over time, writes Graham Bishop on is assessment of the Brexit deal agreed by Brussels and the UK Government and backed by PM May's cabinet.

It emphasises the EU retains its ability to take decisions in its own interests – respecting its “decision-making autonomy”. This is code for the UK being a pure “rule taker” so this is just existing bog-standard equivalence. Moreover, the key phrase in the “Canada” free trade deal is approximately repeated “without prejudice to the Parties ability to adopt or maintain any measure where necessary for prudential reasons”. This phraseology is the route to effectively cutting financial services out of free trade deals.

It is difficult to imagine a worse outcome for the City of London. Professional and financial services are the nation’s largest single export earner – and source of 11% of the UK’s tax revenues. Yet the vital financial services sub-sector is accorded about the same space in the Declaration as the fishing industry. However, the fishing industry employs 12,000 fishermen versus 1,100,000 employees in the financial services industries. We are a net importer of £1.4 billion of fish but a net exporter of £51 billion of financial services.

© Graham Bishop

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