The Financial Services Bill was passed through the Commons this evening without the need for a vote. The legislation sets out how the UK intends to regulate the sector outside of the EU and help secure the UK as a global hub for the finance industry.
Speaking in the Commons today, Treasury minister John Glen described the Bill as a chance for Brexit Britain to “take back control of our financial service legislation”.
When the Bill was first introduced in October he said it was a chance to “seize new opportunities”.
He said: “Now the UK has left the EU, we must ensure we have a regulatory regime that works for the UK and allows us to seize new opportunities in the global economy.
“Following the work we’ve done to prepare for EU exit and ensure a smooth transition to a UK rule book, this Bill is the next step in delivering a regulatory framework that boosts the competitiveness of our world-leading financial services sector and ensures that UK consumers are properly protected.
“It’s part of an ambitious programme to enhance the UK’s first-class standards and our attractiveness as a location for business, both of which will be crucial to help our economy bounce back.”
The Bill also makes it easier for the police to freeze and confiscate bank accounts of criminals and terrorists.
Mr Glen told MPs: “This will ensure that law enforcement are able to quickly and effectively freeze and forfeit the proceeds of crime and terrorist property when held in payment and e-money institution accounts.”
The Bill was criticised by Labour’s Pat McFadden who called the legislation “a mixed bag” and accused the Government of failing to look after the finance sector in EU trade negotiations last year.
The shadow treasury minister said: “The fact that the agreement approved by this House two weeks ago didn’t cover financial services in any meaningful way wasn’t an accident, it was a choice.
“It was a choice that the Government made because step-by-step, the Government has abandoned any attempt to prioritise the market access that the financial services sector, and indeed services in general had, until the end of the year.”
Prime Minister Boris Johnson has admitted the free trade deal agreed with Brussels “perhaps does not go as far as we would like” on financial services.
However, Chancellor Rishi Sunak has described Brexit as an opportunity for the UK to boost its reputation as a financial centre.
Mr Sunak said leaving the EU was a chance to replicate the success of the 1980s when Margaret Thatcher’s deregulation agenda helped financial services prosper.
He hailed Brexit as the chance for the “Big Bang 2.0”.
The Chancellor told City AM: “If you look at the history of the City stretching even further back than that, it has always constantly innovated, adapted and evolved to changing circumstances and thrived and prospered as a result.
“And I think it will continue to do that.”
Negotiations on a memorandum of understanding between the UK and EU on financial services are starting this week.
By March the international partners hope to have an agreement on how they can cooperate on future regulation to ensure firms in both territories can work in both territories.
Financial services are responsible for almost seven percent of the UK’s GDP and adds £130billion to Britain’s economy each year.