23 June 2022

FT: UK financial services co-operation with EU hit by Northern Ireland row

The breakdown of regulatory co-operation between the UK and EU over financial services has become “collateral damage” in the dispute over the Northern Irish protocol, according to peers.

The House of Lords committee looking at how Brexit is hitting the City of London raised concerns on Thursday about the lack of a functioning framework for UK-EU co-operation. It found that the UK government has shown reluctance to engage with Brussels, and urged both sides to talk about financial services at a political level.

Lord Kinnoull, also known as Charles Hay, chair of the committee, told the Financial Times that efforts to ensure financial services corporation after Brexit had been “badly affected as collateral damage” of the continued dispute over Northern Ireland trade arrangements. British ministers are planning to introduce a law that will ditch parts of the Brexit deal on the Northern Ireland protocol, sparking the threat of legal action from Brussels.

Hay said the breakdown in co-operation over financial services was “evidence of the problems coming from the debacle over the Northern Irish protocol”. He added: “Solving the Northern Ireland protocol would unlock a lot of things to the mutual benefit of all.” The committee said that a Memorandum of Understanding (MoU) on regulatory co-operation, which was promised by both sides but has still not been signed, was being held up because of difficulties in the UK-EU relationship.

The committee said the MoU should be a priority for the government alongside other “political and diplomatic engagement with the EU regarding financial services”...

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