Financial Services Sector

Treasury – in the House of Commons on 22nd June 2021.

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Photo of Sarah Atherton Sarah Atherton Conservative, Wrexham

What steps his Department is taking to support the financial services sector following the end of the transition period.

Photo of Chris Grayling Chris Grayling Conservative, Epsom and Ewell

What steps he is taking with Cabinet colleagues to secure an agreement with the EU on financial services.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The Chancellor set out the Government’s strategy on financial services to the House in November—a vision of a sector that is more open, more technologically advanced and a world leader in the use of green finance, serving the communities and citizens of this country. Since then, we passed the Financial Services Act 2021 in April to begin the necessary reforms to our framework, and we have agreed text with the EU for a regulatory co-operation forum.

Photo of Sarah Atherton Sarah Atherton Conservative, Wrexham

There is no doubt that all should be done to support British businesses to export, no more so than in my constituency of Wrexham, which houses one of the largest trading estates in the UK. Businesses are keen to grasp these opportunities—none more so than Matclad, a specialist clay brick slip manufacturer, which is already reaping the benefits of exporting. Does my hon. Friend agree that schemes such as the parliamentary export programme, which I recently took part in, are an excellent opportunity?

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

I am very happy to agree with my hon. Friend. I experienced that myself with my hon. Friend James Gray. The parliamentary export programme is an excellent way of getting that ambition to export out across the country, and it is just another example of this Government’s commitment to grow exports. My hon. Friend Sarah Atherton may also be interested to know that I shall be visiting Cardiff tomorrow to meet the first cohort of FinTech Wales’s FinTech Foundry, a new accelerator programme that will support firms as they seek to build their footprint.

Photo of Chris Grayling Chris Grayling Conservative, Epsom and Ewell

My hon. Friend knows of my concern about the protectionist attitude towards financial services that the European Union has shown over the past few months, and the risks to the City that result from it. We have President Macron hosting people from Wall Street next week, and we have the unlocking of travel in the European Union, which will help the financial services sector there. I hope that the Chancellor and the Minister will do everything they can to encourage ministerial colleagues to do the same here, but will the Minister take whatever responsible steps are necessary in modifying our regulations to ensure that the City and our financial services sector have a strong, competitive future regardless of the behaviour of the European Union?

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

I thank my right hon. Friend for his representations on this matter, and I heartily agree with him. We are promoting the international role of the sector and developing ambitious trade and regulatory relationships with other jurisdictions. We keep all these matters under review. We have taken on board the work of the taskforce on innovation, growth and regulatory reform, and just after Question Time, the Chancellor and I will be meeting representatives of banks as we seek to work with them to make those interventions that our financial services sector needs.

Photo of Pat McFadden Pat McFadden Shadow Economic Secretary (Treasury)

Financial services were not even part of the Brexit agreement that the Government negotiated, because they never made them a priority. Equivalence arrangements are nowhere in sight, £1 trillion-worth of assets have been moved abroad, and now food and drink exports to the EU have fallen by 47% in the first three months of the year. The Government estimate their new trade deal will add just 0.02% to our GDP. Is the sight of Ministers doing a lap of honour for that trade deal not the equivalent of asking our export industries to give thanks for losing a pound and finding a penny? When will the Government actually help our industries with the red tape that is baked into the agreement that they negotiated?

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

I do not accept the right hon. Gentleman’s characterisation of where we are. On financial services, as I hope he knows by now, we have deep dialogue across a number of jurisdictions. That is an ongoing process. If I think about the work we are doing with Brazil, India and China and the dialogues we are having with Switzerland, there is no end to this Government’s ambition to improve our financial services’ relationships and deepen the opportunities that Brexit has given us.