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Financial Services: Equivalence Recognition

Volume 688: debated on Tuesday 26 January 2021

What discussions he has had with his EU counterparts on equivalence recognition for financial services. (911359)

Equivalence is an autonomous technical process that each side is undertaking separately. Officials have had a number of meetings with their counterparts in the Commission over the past 12 months to discuss each other’s processes, and we remain open and committed to continuing dialogue with the EU about its intentions for equivalence.

I thank my hon. Friend for that answer.  Clearly, it would be disappointing if the EU could not follow the UK’s offer on equivalence, given the relative starting positions. Will my hon. Friend comment on the Government’s ambitions with regard to mutual recognition of professional qualifications? What are those ambitions and does he hope that they will be achieved by the signing of the memorandum in March?

My hon. Friend has a lot of expertise in this area. He will know that, alongside the trade and co-operation agreement, we had a joint declaration to establish a structured regulatory co-operation for financial services and to discuss a whole range of matters around equivalence determinations going forward. The memorandum of understanding will be agreed in discussions between the EU and UK by March 2021. That will establish a framework for that co-operation. It would not be appropriate for me to give a running commentary on that, but the plans will come to fruition over the coming weeks.

The Brexit deal was, in effect, a no-deal outcome for financial services. Already some trade has moved, and there is big uncertainty hanging over access to European markets for this vital UK sector. Can the Minister confirm that it is in fact a Government negotiating aim to secure equivalence recognition for UK financial services in the memorandum of understanding being discussed between now and the end of March?

To clarify for the right hon. Gentleman, the equivalence granting process is an autonomous, separate process from the MOU discussion. The MOU is about a framework to evaluate the future direction of financial services across the EU and UK. I remain very ambitious for the financial services sector. The Chancellor and I are continuing to have a dialogue—with roundtables with representatives of the sector this week and next week, as well as one-to-one meetings—to ensure that we listen to the sector, and respond appropriately and ambitiously for the future.