Finance

London mayor calls for equivalence for the City, slams ‘no-deal Brexit’ for finance

London mayor Sadiq Khan will “put pressure on the government” to work with the European Union and deliver a post-Brexit equivalence deal for financial services.

“The final Brexit deal was effectively a no-deal Brexit for finance, with the needs of the sector at the heart of our global competitiveness side-lined,” Khan wrote in CityAM. “This was a major mistake and I will continue to put pressure on the government to work constructively with the EU towards new agreements on regulatory equivalence.”

Equivalence is an EU regulatory regime that grants market access to non-EU firms deemed to be regulated in a sufficiently similar manner to their own, which has not yet been secured by UK policymakers.

London, already impacted by Brexit, also suffered during the pandemic, with the City becoming a ghost town throughout lockdowns as employees worked from home, businesses shut their doors and tourists disappeared. This month, there has been an uptick in activity as some firms start to bring their employees back on a hybrid model, where they split their time between their workplace and home.

However, Downing Street’s worst-case scenario plan, presented on 14 September, could see workers going back to remote working if infections rise above manageable levels.

READ Sir Ed Davey: The Tories cost the City post-Brexit equivalence

The mayor also called on the government to change its immigration system so that it “meets our economic needs”. The end of the Brexit transition period on 31 December 2020 brought with it changes to immigration rules, with European Union citizens now having to apply for a visa to work in the UK.

“This must include introducing a targeted Covid Recovery visa  to help attract international workers into key roles to give businesses breathing space to reopen and maintain critical services,” wrote Khan. “But access to the best talent from around the world, which our financial services have always relied upon to thrive, is becoming increasingly difficult.”

READ Banks need lower taxes for UK to win back finance hub crown, lobby group says

Lobby group TheCityUK also identified the need to decrease processing times and costs for sponsorship visas for high-skilled workers in a report published earlier this month. The Institute of Directors warned of a shortage of lawyers and accountants, saying the labour scarcity for certain jobs is “disruptive across a huge range of sectors and at all levels”.

To contact the author of this story with feedback or news, email Bérengère Sim

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