Business News: No-Brexit budget brings unlocking access to EU financing to the very bottom of the debate.
An ever-deeper rift is beginning to emerge between Britain and the European Union over financial regulation, with the post-Brexit alignment tearing down the British agenda.
In Wednesday’s political statements, Chancellor of the Exchequer Rishi Sunak described plans to increase London’s competitiveness, including easier pricing standards and a likely reduction in bank taxes. There was no mention of trying to get Brussels backing for regulatory equivalence that big companies like HSBC Holdings Plc say is vital.
Highlighting the discrepancy, Jonathan Hill, the former European Commission official who led the review of the listing rules in London, said he doubted the EU would grant equivalence, so it didn’t make much sense to hope so. The UK shouldn’t “sit here and wait and hope the EU gives us some of those decisions that some people are hoping for, those equivalence decisions,” Hill told the BBC on Wednesday. “They won’t.”
Hill’s report, which Sunak approved, called for measures to lure companies with blank checks to float in London and a dual-class stock ownership to allow company founders to retain greater voting power, something seen in the US tech giants such as Facebook Inc.
Unless these decisions are made, London-based financial firms looking to do business in the EU are faced indefinitely with the added complexity and cost of support operations in the UK and the EU. Activities and jobs have started to shift across the continent and continued uncertainty has been a source of disappointment for the financial sector, a major pillar of the UK economy.
As recently as last week, HSBC Holdings Plc said in its latest annual report that reaching a financial services deal should be the priority of British and European negotiators.
“Given the many benefits the UK financial services sector brings to the UK and EU economies, the issue of equality must be a top priority for both sides,” HSBC president said in a statement. Mark Tucker.
Barclays Plc cautioned in its annual report that failure to reach an agreement could make cross-border financial services more complex and expensive. This could have a “significant negative effect” and could force him to retire from certain activities.
Meanwhile, those who have been monitoring discussions in big banks have largely dismissed the idea that the EU would grant UK equivalence in anything beyond a narrow set of areas where it is suitable for the single block. And even these exceptions are limited in time and are largely intended to act as an interim bridge before further operations are relocated.