Financial Services: UK Economy

Debate between Anthony Browne and Robert Neill

Thursday 9th December 2021 Commons Chamber

[Anthony Browne]

I very much agree. I was coming to this point. If we can get those elements into trade agreements, we should aspire to do that. However, often, regulatory agreements between regulators are more appropriate.

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

Does my hon. Friend agree that in addition to the importance of financial services in trade deals, it is important that we are aware of supporting other professional services that go with them, such as law and accountancy? The legal underpinning and enforceability of our financial services deals is critical going forward.

[Anthony Browne]

I fully agree with my hon. Friend. I have been focusing obviously on financial services, but there is the wider concept of financial and related professional services, including legal services. As he knows far better than me, London and the UK are a global centre for legal services. That is a huge export industry in its own right and we should do what we can to promote that internationally.

I was just talking about the importance of the relationship between the UK and Switzerland. We have a lot to gain by working more closely together. That is why I am delighted that the Government are working towards an outcomes-based mutual recognition agreement with Switzerland. I emphasise that it is outcomes-based because it is pragmatic and we share that pragmatism. Similarly, we can have an ambitious agreement with Singapore and other jurisdictions, such as Japan and South Korea.

I am pleased that the Government are working closely with the United States to remove barriers to financial services trade between us. We have some agreements and we could have more. The Government are doing the same with Australia, Canada and New Zealand. Coming to the point about trade agreements that my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) raised, I welcome the agreement in principle on the UK-New Zealand free trade deal, which facilitates cross-border data transfer and recognises the importance of allowing firms to offshore back-office functions. Those are both important for financial services.

We can promote financial services through trade agreements and mutual recognition agreements between regulators to the benefit of both sides. The Government must continue to work closely with our partners through the G7, the G20 and the Financial Stability Board to ensure consistent international standards. As the most globalised of all international financial centres, we are more impacted by global inconsistencies on standards than other jurisdictions.

[Sir Robert Neill]

My hon. Friend makes an important point about co-operation between regulators and agreements between regulators. Does he agree that that is particularly important in the context of dealing with the United States, where much of the regulation takes place at the state, rather than federal level? Therefore, it is not easily embraced in a straightforward, normal type of free trade agreement.

[Anthony Browne]

My hon. Friend makes an incredibly valid point. I know that the UK Treasury has spent a lot of time wrestling with the relationships with the United States, which is in many ways almost unmanageable, because it has 50 different state regulators, and the federal regulators answer to Congress, rather than to the Government, so agreements between Governments may not have an impact on the regulators themselves.

In conclusion, we are at a turning point for Britain’s financial services industry. In the past decade, we have faced the major challenges of the global financial crisis and Brexit, and we took the steps necessary to forge through both of those. We can now look forward to a new era of financial services, with new opportunities. We need to make sure that the UK is the undisputed leading international financial centre, both globally competitive and serving communities and consumers across our country, and exporting more, creating more jobs, funding more businesses and paying more tax. That is something we should all welcome.