Negotiations between the British government and the European Commission on British access to EU financial markets have ground to a halt, according to Rishi Sunak, Chancellor of the Exchequer.
The Chancellor, considered the second-highest post in government after prime minister, is effectively the country’s finance and budget minister. His office is at 11 Downing Street, next door to the prime minister’s official – and in this case actual – residence.
According to Sunak, talks with the EU to try to restore Britain’s access to European financial markets following Brexit have reached an impasse. The government is seeking full access to the EU, as it had while a member of the union. But the EU sees no reason to grant that sort of access to the UK, alone of all the nations in the world, when Brexit was after all a unilateral decision.
And existing EU member states have benefited – in this sector at least – from Brexit.
European financial centres like Paris, Frankfurt and especially Dublin have been able to welcome banks and other financial service providers keen to have a foothold in the EU, to the detriment of London.
Meanwhile, Amsterdam earlier this year took over from the City as the continent’s main share trading centre.
The issue on which the talks have stalled is ‘equivalence’ – the principle that each side will recognise that the other’s rules, while they may differ, are as good as their own. That sounds all fair and well, but it is very much more relaxed than the rules applying to the 27 member states of the EU, whose rules are de facto and de jure the same, and not simply equivalent.
In his speech, Sunak made it clear Britain would pivot away from Brussels, and set its own course. “Now, we are moving forward, continuing to cooperate on questions of global finance, but each as a sovereign jurisdiction with our own priorities,” he said.
Sunak was speaking at the annual Mansion House dinner in the City of London, traditionally a venue well-attended by the financial sector, and an occasion for chancellors to make bold announcements.
This year, however, the event was curtailed by Covid restrictions still in place in the UK, and rather than a lavish dinner, took the form of a breakfast broadcast online.