The Brexit deal has left the City to fight for its own future

‘This Article shall not apply with respect to financial services.’ That’s what it says on page 92 of the EU-UK Trade Co-operation Agreement, and my search engine has found nothing else in the monster document offering any comfort to the sector, which contributes £130 billion to the UK economy and provides more than a million jobs. That’s in marked contrast to fishing — £1.4 billion, 24,000 jobs — which gets a compromise settlement (pages 919-925, if you’re keen) accounting for every last haddock, hake and horse mackerel. No great surprise in a Brexit process in which political symbolism trumped economic sense at every turn: but does it mean our bankers have been abandoned, without passports or Portaloos, on some bleak financial equivalent of Manston Airport? If so, why haven’t they raised more protest?

Despite reassurances from Rishi Sunak, the City’s position looks substantially weaker than it did before. To be fair, financial services were never intended to be covered in this agreement; but what we know so far is that previous ‘passporting’ rights have been forfeited and UK firms’ access to EU markets now depends on compliance with the different requirements of each member state, under ‘equivalence’ rulings that can be withdrawn at 30 days’ notice.

The Chancellor and the Bank of England might have retorted by making it tougher for EU banks to remain full players in London: pushing them out of clearing services, or reducing the acceptability of EU government bonds as security for short-term borrowing at the Bank. Instead, our side seems to have rolled over — perhaps under pressure from US firms threatening to leave London en masse rather than merely move deal-booking centres to Frankfurt or Dublin.

In short, while every effort went into cobbling a deal on trade in goods (always the Brussels priority), financial service providers, who generate so much UK wealth, have been left to fight for their own futures.