European Union (Future Relationship) Bill

Lord Flight Excerpts

3rd reading & 2nd reading & Committee negatived & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Wednesday 30th December 2020 Lords Chamber

[Lord Flight (Con) [V]]

I congratulate and thank the Prime Minister and the Brexit negotiating team on achieving a good deal and ongoing relationship with the EU. I agreed with much of the speech of the noble Baroness, Lady Deech, and the constructive comments of the noble Lord, Lord Butler.

My question for the Government is: what will the deal do for the financial services industry? From reading the co-operation agreement, it appears that little or no material changes are proposed. None presented in the co-operation agreement is specifically damaging to financial services. This is surprising given the French hostility and claims, during the negotiations, that France would win over substantial business from London.

Chapters 2 and 3 in the agreement include well-established provisions on cross-border trade in services and investment, which are expected to secure continuing market access across a broad range of sectors. Section 6 deals specifically with financial services. It includes provisions on cross-border trade in financial services and investment. The agreement provides protections that should ensure that EU and UK regulatory authorities can act to ensure financial stability and integrity, and to protect customers. The two parties agreed a joint declaration of commitment to their shared objectives, and a memorandum of understanding for regulatory co-operation has been signed.

Section 7 provides the important reform enabling lawyers acting for clients in the UK but who have business elsewhere in Europe to deal with the clients’ business across the EU. There is the important liberalisation of digital trades, which will be dealt with subsequent to its first being raised. Title VII provides joint support for SMEs but does not address the seven-year life limitation and state aid issues, which have limited EIS funding for SMEs.

Overall, the agreement looks okay for the financial services industry, but there is much more yet to be agreed. I keenly await the Government’s reaction when they negotiate areas for the financial services industry.