I start by declaring an interest. Before entering the House, I worked as a corporate lawyer in the City for Freshfields Bruckhaus Deringer and for Simpson Thacher & Bartlett, and as a senior executive at HSBC.
I will specifically address financial services post Brexit. I echo my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) on how much of an asset financial services are to our country. I will not repeat the statistics he outlined, but they are all accurate and true.
It is worth considering why our financial services sector is such a world leader, which is not just because it has been around for a long time but because the in-depth, unique infrastructure surrounding financial services—whether it be the lawyers, accountants, consultants or the like—makes Britain such a good place for this industry. Those advantages are not going to change.
It is true that business never likes uncertainty, and there is undoubtedly uncertainty in certain areas of our regulatory and legal frameworks surrounding financial services. If the House will indulge me, I will address two of those areas. First, as Members will fully appreciate, a key area that has been highlighted is this country’s desire to continue benefiting from the single passport for financial services that operates within member states of the European Union, whereby a firm that obtains authorisation to carry out a particular activity in one state can carry out such activity in other member states without further authorisation or regulation. It would be good to hear from the Minister and the Secretary of State whether we intend to try to maintain that position.
Another area of real uncertainty is the principle of equivalence. At the immediate point of exit, EU law will form part of UK law and, therefore, as a matter of fact will be equivalent. However, it should not be controversial for the United Kingdom to keep the bulk of EU financial regulation then in force as, frankly, much of it was either largely driven or written by the United Kingdom or derives from international accords of one kind or another. That is another area where certainty for business
would be appreciated. In particular, the clearing of euros in the City of London is attracting a lot of concern.
Having said that, we need to ensure that our reasonable concerns about this uncertainty do not lead us in the long term, post Brexit, to try to keep everything the same as now. Why should that be? It would mean accepting wholesale a European regulatory framework that we would no longer have a role in shaping, and which would consequently allow the European Union—if, perish the thought, it wished to cause us difficulty—to stifle the activity of our financial services sector.
I do not have time to go into what I think the vision for financial services should be post Brexit. [Interruption.] That is a shame for everybody. We need a transition in order to get there, but our financial services sector has a bright future after Brexit. I look forward to the Minister’s response.
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