The uk-eu relationship in financial services

The Committee welcomes the Government’s innovative approach 
to securing market access for the UK’s financial service sector 
and, in particular, hopes for the successful conclusion of a Mutual 
Recognition Agreement with Switzerland.
241. 
We urge the Government to continue to innovate and learn from its 
successes as it pursues further Mutual Recognition Agreements. 
While we note the traditional limitations of Free Trade Agreements 
with respect to financial services, the Government should continue 
to seek to embed the interests of financial services in the Free Trade 
Agreements it pursues as much as possible.
The labour market
242. The UK’s financial services sector has a reputation for cosmopolitanism 
and openness to immigration. Miles Celic was clear that this needed to 
continue, ensuring that the sector is “continuing to attract people, which is 
the single biggest issue for most of our members—getting the right talent, 
both domestically and internationally, into the UK.”
307
This sentiment was 
echoed by Andrew Pilgrim, who stressed that “openness is key … [including] 
on immigration.”
308
243. The Economic Secretary spoke of the support the Government is providing 
in this regard:
“In May last year we improved the visa for global talent. In the spring 
of this year, we have brought in the visa for high-potential individuals 
and the global business mobility visa. We will be looking to build on 
that this summer with announcements on the global talent network and 
how to bring in talent from key jurisdictions important to the growth of 
FinTech and the financial services sector.”
309
The importance of openness
244. More broadly, the evidence the Committee received showed widespread 
agreement with the need for the UK to retain its reputation for openness, 
“that key philosophy that has made the UK one of the major financial centres 
globally”.
310
Caroline Dawson said it was important to ensure that “we do 
305 
Q 46
306 
Q 101
307 
Q 15
308 
Q 39
309 
Q 93
 (John Glen MP)
310 
Q 38
 (Caroline Dawson)

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THE UK-EU RELATIONSHIP IN FINANCIAL SERVICES
not have a fortress UK approach, but a global financial centre approach and 
an openness approach. We have the ability outside of the EU to maintain 
that better than we would have been able to within the EU.”
311
Peter Bevan 
stressed:
“It would be a mistake for the UK to take the view that, because the EU 
is building a fortress that is very difficult to enter from outside, we should 
do the same to give ourselves a bargaining chip and say, “Well, we’ll take 
our wall down now if you take yours down”, because the building of 
that wall would inhibit the very kind of global financial centre that the 
UK has become so well known for and so successful at … it is the right 
approach for the UK to keep those barriers to entry low, appropriately 
protecting consumers in the way that the UK’s current regime does … 
Maintaining that balance, even if there is no reciprocity on the side of 
the EU, will in itself be good for the growth of the UK system.”
312
245. For the Bank of England, Sir Jon Cunliffe agreed on the need for openness, 
arguing that “Being open enhances the efficiency and risk-sharing of the 
financial system”. He cautioned that “it also necessitates the effective 
management of cross-border risks … Where other jurisdictions are not as 
open, this approach might naturally create some asymmetries between the 
UK and the other jurisdictions.” However, he ultimately concluded that “the 
overall impact of such asymmetries are likely to be fairly limited, including 
from a competitiveness perspective.”
313
246. Key to maintaining the UK sector’s openness was a rejection of reciprocity, 
where the UK would only take an open approach if other jurisdictions did the 
same. Caroline Dawson was unequivocal in her assessment that reciprocity 
was “not the way forward”.
314
The City of London Corporation agreed: “the 
UK should not adopt a reciprocal approach. Unilateral recognition of overseas 
services and firms can provide significant benefits to UK customers with no 
threat to UK financial stability, market integrity or consumer protection.”
315
247. For the Government, the Economic Secretary reiterated “the agenda that 
the Chancellor has set out of being open, embracing technology, being 
competitive and embracing the opportunities of green finance and the green 
economy”.
316
248.