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UK’s financial sector will 'no longer be a rule-taker' says chancellor

By Amanda Cooper

Chancellor Sajid Javid is working on City white paper due this spring

British chancellor Sajid Javid said that the financial sector “will no longer be a rule-taker” following the UK’s exit from the European Union.

Javid, who was writing in CityAM, said ministers were working on a white paper due this spring that would outline the vision of the financial services sector once the Brexit transition period, which concludes in late December, is over.

The strategy will outline how Downing Street expects its preferred system of “outcome-based equivalence” to work with the EU, as well as the UK’s framework for granting equivalence to other jurisdictions.

“Of course, each side will only grant equivalence if it believes the other’s regulations are compatible,” Javid wrote. “But compatible does not mean identical, and both the UK and the EU have at different times recognised the importance of focusing on regulatory outcomes.”

Javid repeated his commitment to concluding “a full range of equivalence assessments” by June of this year, to give the system sufficient stability ahead of the end of transition.

The financial services industry employs over one million people in the UK, with two thirds of those outside of London, according to Javid, who said the sector is contributing £127 billion to the economy every year.

A recent report from the City of London Corporation showed the UK’s financial services sector contributed a record £75.5 billion ($79bn, €88.7bn) in taxation in 2019, equal to 10.5 per cent of all government tax receipts.

“We will no longer be rule-takers, but we remain committed to the highest international standards of financial regulation and to shaping global rule-making” Javid said. “We may choose to do things in the same way as the EU if it works for the UK. But there will be differences, not least because as a global financial centre the UK needs to keep pace with and drive international standards,” he added.

FURTHER READING: Over a thousand EU financial services firms plan to open UK offices post Brexit

FURTHER READING: British financial services sector pays record tax bill

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