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Rishi Sunak has offered financial services firms the prospect of closer access to EU markets than is outlined in the Brexit trade deal, after Boris Johnson admitted that this aspect of the deal fell short of hopes. from United Kingdom.
With MPs and experts still perusing the 1,246-page details of the deal ahead of votes in the Commons and Lords on Wednesday, increasing attention has focused on the relative lack of provision for the service sector, which represents about 80% of the UK. economy.
Johnson praised the deal, finally agreeing on Christmas Eve and saying it achieved what many had believed impossible by striking a trade deal that would allow it to diverge from EU standards.
On services, which also account for 50% of UK exports, Johnson told the Sunday Telegraph that there was “access for lawyers, lawyers” and “good business for digital.” But with financial services, he said the deal “may not go as far as we would like.”
Speaking to reporters on Sunday, Sunak said the goal was to finalize agreements on the equivalence system, whereby UK banks and other financial institutions can trade, on a regulatory basis, as if they were still in the EU.
The chancellor said he hoped that a planned memorandum of understanding on the issue between the UK and the EU in the coming months could clear many obstacles.
“This agreement also provides peace of mind because there is a stable cooperative regulatory framework mentioned in the agreement,” Sunak said.
“I think [that] it will give people the assurance that we will continue in close dialogue with our European partners when it comes to things like equivalency decisions. “
However, the impact on many service-based businesses will be immediate. Sally Jones, who leads Brexit issues for EY, said that as of January 1, the UK’s accounting and auditing ratings would no longer be recognized in the EU.
“We will no longer be able to send audit partners who have UK audit qualifications to sign overseas audit reports, which means that the quality of the audits will be slightly lower, if the best person who could have given that opinion of Audit is a Brit, ”he told the BBC.
“If I want to practice in Italy, Germany or Spain, I will have to re-qualify, which would mean taking horrendous exams and worse, three or more years of professional experience.”
Despite such concerns, the trade deal will easily go through the Commons after Labor leader Keir Starmer announced last week that his party would back the plan, saying it was better than the prospect of no deal.
Shadow Chancellor Anneliese Dodds said Sunday that this support came with many reservations.
“Businesses have been through so much, the last thing they need now is even more legal uncertainty,” he told Sky News.
But this is not enough. It’s not what the Conservatives promised, but Labor won’t stand in the way of those measures being implemented. They are needed now. Businesses are asking to be as certain as possible at this challenging time. “
A Labor MP who opposes Starmer’s decision said they expected relatively few of the resignations expected by shadow judges during Wednesday’s vote.
“I think a lot of them feel in their bones that Keir is making a mistake here,” the MP said, and said some even believed it could cost Labor the next election. “But it’s his mistake and it’s years away. The pain of resignation is immediate, so they will move on. “
Scotland’s National Party confirmed on Sunday that its MPs will vote against what it called “Boris Johnson’s extreme Tory Brexit” next week, saying the deal strengthened the case for Scottish independence.
On the conservative side, Brexit-minded MPs from the influential European Research Group (ERG) have yet to deliver an official verdict, with some legally qualified MPs and others from the organization studying the deal.
However, some MPs associated with the group told The Guardian that they did not expect the ERG’s self-styled “star chamber” to uncover any elements that the group would vehemently object to, so they expected any conservative revolt to be small.
