Brexit: Expert discusses ‘importance’ of UK financial services
Julian Jessop, an economics fellow at the Institute of Economic Affairs, who has previously worked for the Treasury, HSBC and Standard Chartered Bank, made the claim. He said despite predictions of 75,000 jobs moving to the continent after the UK left the EU, a relatively small number of people had relocated.
He said the UK’s laws and regulations were far more favourable to businesses and meant Britain would remain a global finance hub.
He told Express.co.uk: “We’re a relatively low tax economy, with far more flexibility in hiring in the labour market.
“These are advantages we had within the EU, so leaving the EU doesn’t change that, but nor does it remove them.
“I remember talking to somebody from a very well known British bank who said ‘why on Earth would anybody want to set up any sort of business in Paris? because of all the regulation you get and the high taxes.
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“There are lots of advantages the UK has as a financial centre that won’t be impacted by Brexit.”
The UK is currently undergoing negotiations with the EU to agree to a “memorandum of understanding” on future regulation.
The document will set out how firms can continue to do business across both territories.
Brussels also has to decide on the issue of so-called “equivalence” – determining if the UK’s rules and regulations are suitably compatible with its own that firms in London can have access to the EU market.
The UK has already granted the EU equivalence in 17 different areas.
Mr Jessop said the UK would thrive regardless of whether equivalence was granted.
He said: “Obviously the fact there isn’t a comprehensive deal that covers financial services is a pain for the City, but it’s manageable for now, at least.
“The old system of passporting allowed British based firms to sell pretty much anything they liked into the EU without requiring any additional paperwork or approvals.
“They’ve lost that now but they can still sell services into the EU on a country-by-country basis if the regulator allows.”
Chancellor Rishi Sunak has described Brexit as an opportunity for the UK to reinforce its reputation as a global financial hub.
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With Britain able to diverge from the EU, he said leaving the EU was a chance to replicate the success of Margaret Thatcher’s ‘Big Bang’ in the 1980s, when financial services boomed following mass re-regulation.
Speaking to City AM, the Chancellor hailed Brexit as the chance for the “Big Bang 2.0”.
Mr Jessop was more cautious in his language when speaking to this website, but agreed the UK would see long term benefit.
He said: “Big Bang is going a bit strong, because that was massive overnight change.
“It’s more going to be a drip-feed of small changes, which is probably sensible anyway.
“If we did change everything overnight, then it would worry the Europeans a bit more than boiling the frog and doing it bit by bit.”
The UK is eager to maintain the ability to trade into the European market despite having left the bloc.
The issue is at the discretion of Brussels and mass changes to regulation could see the EU27 limit the K’s access.
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