David Davis sets out post-Brexit vision for financial services

David Davis has committed to protecting talent within financial services after Brexit, as he gives his clearest indication of the government's thinking for the sector yet.

Speaking at UBS this morning, the Brexit secretary set out his vision of the City's future relationship with the EU after March 2019, based on three key planks: protecting financial stability, ensuring consumer protection and supporting the system built since the 2008 crash.

A major component would be protecting the "mobility of workers and professionals across the continent," Davis said. "Whether this means a bank temporarily moving a worker to an office in Germany, or a lawyer visiting a client in Paris, we believe it is in the interests of both sides to see this continue."

An immigration bill, which will be introduced next year, "will set out in more detail what this new system will look like", he added, emphasising that government had been listening to the sector's concerns around talent.

"While this [bill] will mean we’re better able to control the numbers of people coming to the UK — it doesn’t mean pulling up the drawbridge. That clearly wouldn’t be in Britain’s interest."

Davis also hinted that the government was minded to adopt some proposals put forward in the IRSG's recent blueprint for the City after Brexit, citing the report as putting forward "some innovating ideas on possible new frameworks", particularly around exemption regimes and mutual access on the basis of regulatory alignment.

And Davis was unambiguous when it came to clearing, which he said must remain in London. "This is not, a zero sum game," he added, noting fragmentation would ramp up costs for financial services firms and connected businesses across the EU.

But the minister, who last week failed to gain any ground in talks with his countepart Michel Barnier, said it was not just the UK government who must ensure London retains its position.

"For Europe, London is a gateway to global financial markets," he said. "This isn’t just the City of London — it’s the first City of Europe, the primary financial centre for this continent. We want our exit to mark the start of a new partnership with our closest neighbours and trading allies. And together with the European Union — we must work to protect the key European asset that is the City."

Davis added: "Protecting the City — and the contribution it makes to communities and economies right across Europe — is a responsibility not just for the UK but for Europe as a whole."

He also reiterated the Prime Minister's commitment to a transition - or implementation - period, saying it would be "about" two years. This could be agreed "very early next year", he claimed.

Amanda Blanc, chief executive of AXA UK and Ireland, called on the government to look at the insurance industry to provide "the foundations that a post-Brexit UK financial services sector needs to be based upon".

She added: "Promoting our expertise and capabilities alongside a track record in innovation and regulation that no other market can match. That is how we can avoid fragmentation of the EU trading block and provide certainty and stability to the market in the short and medium term.”

Full story: David Davis sets out post-Brexit vision for financial services: City A.M.

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