‘Extraordinary’ lack of detail on finance in Brexit deal
THE lack of detail for the financial sector in the UK’s Brexit deal has left one local finance expert incredulous.
Venture capitalist Jon Moulton said he was very surprised at the near absence of information on such a vital part of the economy.
‘I’m disappointed at the volume of detail on financial services because that’s obviously the area that matters most to Guernsey, and at the moment it’s very little more than relatively meaningless words, with a statement that by the end of March they’ll agree a memorandum of understanding, which is not an agreement, so we’ve got to wait until March to even get any idea of what’s going to be in that.
‘It’s extraordinary, the totality of this is around 15 lines of text in something that’s been negotiated for many months, so realistically it looks like they just dodged at arriving at any conclusions from both sides.’
Mr Moulton, chairman and founder of the Better Capital fund vehicles, started reading the voluminous document on Boxing Day and was underwhelmed to find that were no real conclusions for his industry.
What was billed as the biggest overnight change in modern commercial relations, is now predicted to last for years. ‘Fishing is obviously very clear and that’s favourable, there’s some very complicated stuff about VAT, which I think is a pretty small point which I don’t think your readers will be very interested in, and then financial services, which is the bulk of our economy, is almost a non-event.
‘All we can do is sit back and see how things develop over the months and years ahead.
‘It’s certainly possible that this agreement could have come out worse for the island, so to that extent we should be happy, but it really isn’t the major event that most of us expected it to be.
‘If I’m a fisherman, I’m very happy, and otherwise it isn’t going to make much difference to me.’
Prime Minister Boris Johnson admitted over the weekend that his deal fell short on provisions for the City.
The ability of firms in Britain to offer financial services in the European Union will depend on whether EU policymakers determine that Britain’s new regulations are close enough to their own to be trusted – a critical concept known as equivalence.
While the calamity of a no deal was avoided, Mr Moulton said the questions and the balance between risk and opportunity remained.
‘Yes, there is certainly an opportunity for the UK to diverge from European regulation in financial services. However, that’s all going to be against a background that the EU can, if they choose to, retaliate.
‘Clearly there is more of an opportunity to be different from Europe for the island, but that has to be done very carefully because we can’t realistically afford to upset the Europeans very greatly.
‘I don’t think it’s really going to make much difference.’
