Warning over 'self-inflicted wound' of hard Brexit on financial services

Financial services are the "bloodstream" of the UK economy and Britain risks a "self-inflicted wound" if a hard Brexit is pursued, a senior British Labour MP has warned.

Warning over 'self-inflicted wound' of hard Brexit on financial services

Financial services are the "bloodstream" of the UK economy and Britain risks a "self-inflicted wound" if a hard Brexit is pursued, a senior British Labour MP has warned.

Liz Kendall said firms are "deeply concerned" about losing membership and access to the single market and their passporting rights, which allow financial firms authorised in the UK to operate across the European Economic Area.

The former Labour leadership contender urged the British government to maintain an integrated market for the sector and draw up transitional plans so firms do not hit a "cliff edge" when Britain leaves the EU.

She told MPs: "Businesses... are deeply concerned about losing their membership of the single market and passporting rights.

"And I care about those jobs, I care about the contribution those companies make to the economy, and it's right for us to raise these questions."

Ms Kendall said Britain's financial services sector has an "unrivalled reach across the globe" and must be protected.

She said: "They are the bloodstream of the wider economy, pumping money through the country by lending it to local businesses. They attract huge levels of inward investment - around £100 billion over the last decade, more than in any other sector - and they are crucial for our pensions and mortgages and for funding the public services on which we all rely."

She said leaving the EU has serious implications for these businesses and urged the Government to commit to a transitional agreement for when the UK leaves the EU.

Ms Kendall said: "Without transitional arrangements, companies could see their passporting rights being suddenly removed with nothing put in their place, creating legal doubt over huge parts of their business."

She also urged the Government to do all it can to maintain an integrated market in financial services.

"Putting up barriers to trade would be a self-inflicted wound that makes us all worse off - not just in the UK but in mainland Europe too," she said.

Her comments, made in a backbench Commons debate on financial services and the EU, came after the High Court ruled that the Prime Minister must give Parliament a vote to trigger Article 50 and leave the EU.

Labour former minister Ben Bradshaw hailed the ruling as "excellent" and said it "gives the British government the chance to reflect on the invocation of Article 50".

More in this section

Lunchtime News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up