City minister: Square Mile will not turn into Singapore-on-Thames
Britain will not slash regulatory standards in the City in a bid to win business after Brexit, the City minister has said.
Addressing concerns about the future prosperity of the Square Mile, John Glen denied that rules in the financial hub would be relaxed to improve competition, insisting that its reputation relied on its regulatory regime.
Glen shrugged off concerns that rule changes would transform the City into a so-called Singapore-on-Thames, adding that it was not “seeking to wilfully diverge in every area for the sake of short-term presentational gain”.
The comments come amid uncertainty over the future of the Square Mile following the UK’s departure from the EU.
Prime Minister Boris Johnson has said that the Brexit deal secured on Christmas Eve will allow the City to thrive “like never before”.
But experts have questioned whether the deal ensures the future prosperity of financial services, as the agreement focuses primarily on goods.
One potential solution would be to secure equivalence with the EU, which would allow London-based companies to continue doing business across the bloc.
This would require the UK to keep its regulation closely aligned with EU rules.
Glen, who also serves as economic secretary to the Treasury, said: “The integrity and the reputation of London in financial services is not going to be enhanced by rapid deregulation or reckless short-termism.”
“Where we have the opportunity to do things differently in future — and it makes sense for the UK — we’ll be ready and willing to do so. But we take the responsibility of working in an operating environment that needs to be reliable and of a high quality, in a global context, very seriously,” he told the Sunday Times.
“What we want is a model of structure and co-operation with the EU that allows us to maintain that stability and mutual market access.”
City officials are this week set to kick start talks with Brussels in a bid to seal an agreement on financial services by March.
Treasury figures including Glen and director of financial services Katharine Braddick will meet with lobby groups as they look to draw up a memorandum of understanding with the bloc, the Mail on Sunday reported.
A number of European and UK regulators have agreed to rollover agreements to prevent major changes this month, but they will expire in due course.
The CBI has said that businesses need urgent confirmation of grace periods. Italy yesterday granted UK finance firms a six-month grace period to keep operating in the country after Brexit.