PM Boris Johnson to work with business leaders on regulatory change as EU hires trade rules enforcer

Thu 7 Jan 2021
Posted by: William Barns-Graham
Trade News

city of london

Prime Minister Boris Johnson has called for industry leaders to back legislative reform, asking businesses to share ideas on how to change regulations to support economic growth.

In a call with 250 bosses reported by the FT, Boris Johnson said he was “bubbling with enthusiasm” about the UK’s new opportunities having completed the country’s split from the EU on New Year’s Eve.

He said he hopes to work with business leaders to make the most of the UK’s newfound independence.

Alarm bells

This may ring alarm bells in Brussels, with the EU having successfully negotiated level-playing field mechanisms within the recently signed trade deal. 

If the UK diverges from the EU in areas such as workers’ rights and environmental protection, this could trigger sanctions including the imposition of tariffs on key UK industries.

Enforcer

The EU yesterday announced the appointment of its first Chief Trade Enforcement Officer – someone likely to keep a close eye on the UK’s next steps. 

Denis Redonnet takes on the remit as part of his role as deputy chief of the Directorate-General for Trade (DG TRADE).

The European Commission said his appointment would strengthen the EU’s implementation and enforcement agenda, “notably in relation to the climate agenda and labour rights”.

Financial services

Yesterday’s call was also attended by UK chancellor Rishi Sunak, who called for ideas over how best to support financial services in future.

He claimed Britain’s departure from the EU was “an opportunity” for the sector, although the trade deal agreed with Brussels left it facing new obstacles to trade with the EU.

Equivalence talks

The government is trying to reach a financial services equivalence deal by March, reports City AM. City minister John Glen and senior Treasury civil servant Katharine Braddick will lead the talks for the UK.

An estimated £1 trillion of assets have been moved from the UK to the EU by financial services companies trying to cope with the lack of an EU wide arrangement so far.

Braddick and Glen will consult with financial lobbying groups and seek a memorandum of understanding from the EU on future financial access.

BoE baulks at EU rules

However, the Governor of the Bank of England has said the UK must remain able to make its own rules for the City of London, even if it means EU authorities refusing to allow access to European markets, the Telegraph reports.

Speaking to MPs on the Treasury select committee, Andrew Bailey said: “I would strongly recommend that we do not become a rule-taker. I think that is a very bad place to end up.”

He added: “If the price of that is no equivalence, then I’m afraid that will follow. That is the wrong outcome for the UK.”