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Brexit: financial services inquiry

Inquiry

The report highlights the importance of agreeing a transitional period for financial services, so that a 'cliff edge' is avoided, both at the moment of withdrawal following the Article 50 process and as the country moves to a new relationship with the EU. It finds that the third-country equivalence provisions in EU legislation are not a substitute for the passporting arrangements, which UK-based firms can currently use, as they are patchy and vulnerable to political influence. A priority for the Government in the negotiations should be to seek to bolster those provisions, should passporting not be an option. The Committee also concludes that the wider EU economy relies on the financial services currently provided in the UK, which may not be easily replicated elsewhere in the EU, and that, therefore, it would be in the EU’s interests to preserve access to its market for UK-based firms.