MPs desperate to secure UK as financial centre post-Brexit

LaToya Harding
·3-min read
Canary Wharf skyline, LONDON
Canary Wharf skyline, part of London's financial district. Photo: Jonathan Brady/PA via Getty Images

MPs have launched a new inquiry into the future of financial services in a bid to secure the UK as a financial centre once it fully departs from the European Union next month.

The Treasury Committee said it will examine how financial services regulations should be set and scrutinised by parliament, as EU directives will cease to govern new rules and regulations.

It will also consider how regulators are funded and the extent to which financial services regulation should be consumer-focused.

Mel Stride, chair of the Treasury Committee, said: “The financial services sector is a crucial component of the UK economy. There are choices to be made by the UK government that will have long-lasting impacts on the future of the sector.

“As part of our new inquiry, we’ll examine how the sector can best take advantage of the new trading environment, what regulatory changes should be made, and what role parliament should play in influencing and scrutinising such changes.”

She added: “We’ll make a series of recommendations for how the government, public bodies and the sector itself can ensure that the UK remains a premier financial centre.”

The deadline for evidence submissions is 8 January 2021 at 5pm.

The previous Treasury Committee launched an inquiry called The Future of Financial Services early last year. However, due to the extensions to the Article 50 Brexit process, the inquiry did not hold any oral evidence sessions.

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The inquiry comes after Rishi Sunak last week outlined plans to boost the UK’s position as a world-leading financial centre, as well as extend its leadership in green finance and financial technology.

In a statement to parliament, he unveiled that the UK’s first long term asset fund will be “up and running within a year,” and that from 2025 all “large companies and financial institutions across our economy” will have to disclose their carbon footprint.

He also plans to issue the UK’s first green gilts, subject to market conditions, to bolster the country’s status as a global financial hub and leader in carbon reduction.

In his first speech on financial services since becoming chancellor in February, he laid out the government’s ambitions for the financial services sector, including its approach to the equivalence process, as the UK builds its global role outside of the European Union.

Although Britain left the EU in January, the post-Brexit transition period ends on 31 December. If no agreement is made, trade will default to World Trade Organisation (WTO) rules.

Sunak said: “Financial services will be essential to our economic recovery from coronavirus, creating jobs and growth right across our country. And as we leave the European Union and start a new chapter in the history of financial services in this country, we want to renew the UK’s position as the world’s preeminent financial sector.”

The financial services sector employs more than 1 million people across the UK and contributes to more than £137bn ($180bn) of value to the country’s economic output.

Two-thirds of people working within the financial services sector live outside of London, with half of all financial services exports also outside of the capital.

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