Show more aggression to protect City says Tory MP
‘Political point-scoring’
BRITAIN must threaten to deregulate the City if Brussels blocks a Brexit trade deal that gives its financial services access to EU markets, a Tory MP has warned.
Bim Afolami said ministers should tell the EU they will slash financial rules to let the City take on Paris and Frankfurt following any attempt to snatch business from London.
The Tory MP, who was an HSBC executive in the City before being elected in June, said playing hardball was the only way to change the EU’s uncompromising stance.
Michel Barnier, the European Commission’s chief Brexit negotiator, says no free trade deal can include financial services.
However, Mr Afolami told an event organised by the Politeia thinkto tank: ‘I voted Remain in the EU referendum, but I believe we need to get on with Brexit and get it right.
‘It is complacent to believe Europe will accept London’s domination of European financial markets and not seek to promote their own centres, like Paris and Frankfurt.
‘We need to make sure we are prepared to aggressively compete if others seek to damage the City.’
He said Britain could become a global leader in financial technology – or fintech, which uses smart devices to deliver traditional banking and investment services online.
Mr Afolami added: ‘In regulatory terms, the new areas of fintech mean we have an opportunity to be the best place in the world for these new markets.
‘ In the face of increasingly complex European financial regulation, we need to make sure London becomes globally a place for better, but also simpler, financial regulation.
‘Financial services are Britain’s most successful industry. We need make sure that after Brexit, they remain so.’
Mr Barnier has claimed there is ‘no place’ for financial services in a post-Brexit trade deal.
In December, the French former minister insisted: ‘ There is not a single trade agreement that is open to financial services. It doesn’t exist.’
However, the Eurosceptic campaign group Change Britain has found that Mr Barnier personally campaigned for the EU’s trade deal with the US to include financial services when he was a European commissioner.
In a speech in 2013, he said: ‘ We need to be ambitious enough to build a real transatlantic marketplace... we need to emphasise market access, including for services and investment.’
Change Britain chairman Gisela Stuart said: ‘EU negotiators might be trying to talk tough, but previous trade talks reveal they are being disingenuous.
‘Not only does the EU have precedent for including financial services in free trade deals, their inclusion in a future UK-EU deal would be overwhelmingly to the benefit of EU member states.
‘It’s time Brussels recognised this and started negotiating in good faith rather than damaging their own members’ economies for the sake of political point-scoring.’