Brexit: Expert discusses 'importance' of UK financial services
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Amid threats to levy tariffs against the UK if it seeks to deregulate the financial district from Michel Barnier, the former Brexit Party MEP claimed Britain should not be scared of the EU. Not only should the UK be “prepared for scrap” with Brussels but the Prime Minister should look to new emerging markets and deregulate the City. Mr Habib told Express.co.uk: “We must be prepared to have a scrap with them.
“Our financial district is very important and we shouldn’t bring the EU to heel.
“I don’t want a financial services deal with them at all, we should be targeting the Far East and Africa.
“That’s where we should be going. The growth areas in the world are not the EU.
“We must stop this narrative that we can’t survive unless we have the EU.
“Grow some confidence and deregulate the city. Jettison EU regulations.
“And so what if we lose business to the EU, they need us more than we need them.”
The EU has taken a tough line with the UK financial sector and has so far refused to grant equivalence to British firms.
This means financial services must adhere to two sets of regulations instead of one.
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The EU and UK are holding talks over a memorandum of understanding on financial services to address certain matters, although it is thought equivalence will not be granted.
Following the lack of financial services conditions agreed in the Trade and Cooperation Agreement, some have argued the UK must take on a Singapore-on-Thames model.
This would mean dropping regulations and taxes in order to entice firms to stay in the UK rather than moving to markets in Amsterdam or Frankfurt.
However, due to the agreements made on the level playing field within the trade deal, the EU has indicated it will take punitive action if the UK does so.
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In a threat to the UK, Mr Barnier said: “With our agreement, the UK can now export goods without quotas or tariffs to the EU.
“However, he announced his intention to deregulate in three areas: financial services, pesticides and working hours.
“Will this change of rules lead to unfair competition which risks destroying jobs in Europe?
“All situations of distortion of the competition will have to be assessed objectively.
“If necessary, as the agreement provides, we could respond with countervailing measures by reinstating tariffs. Part of the deal could even be suspended.”
Despite calls for the UK to maintain strict alignment with the EU, governor of the Bank of England Andrew Bailey, stated Britain cannot be a rule taker post-Brexit.
He labelled calls from the EU for City banks to comply with Brussels as unacceptable now the UK has left the bloc.
Mr Bailey also stated the EU had granted equivalence status to states such as Canada, the US, Australia, Hong Kong and Brazil.
He said: “The EU has argued it must better understand how the UK intends to amend or alter the rules going forwards.
“This is a standard that the EU holds no other country to and would, I suspect, not agree to be held to itself.
“It is hard to see beyond one of two ways of interpreting this statement, neither of which stands up to much scrutiny.”
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