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Rishi Sunak offered financial services firms the prospect of closer access to EU markets than indicated in the Brexit trade deal, after Boris Johnson acknowledged that this aspect of the deal was in fall short of UK hopes.
As MPs and pundits still grapple with the details of 1,246 pages of the deal ahead of House of Commons and Lords votes on Wednesday, growing attention is being drawn to the relative lack of services for the service sector , which represents around 80% of the UK. economy.
Johnson praised the deal, finally agreed on Christmas Eve, saying he had achieved what many thought was impossible by securing a trade deal that deviated from EU standards.
On services, which also account for 50% of UK exports, Johnson told the Sunday Telegraph there had been “access for notaries, lawyers” and “a digital bargain”. But with financial services, he said the deal “may not go as far as we would like”.
Speaking to reporters on Sunday, Sunak said the aim was to tighten up agreements on the equivalency system, whereby UK banks and other financial institutions can negotiate, on a regulatory basis, as if they were still in the EU.
The Chancellor said he hoped that a planned memorandum of understanding on the issue between the UK and the EU in the coming months could iron out many obstacles.
“This agreement is also reassuring as there is a stable regulatory cooperation framework mentioned in the agreement,” Sunak said.
“I think [that] will give people the assurance that we will remain in close dialogue with our European partners on things like equivalency decisions. “
However, the impact on many service-oriented businesses will be immediate. Sally Jones, who heads Brexit matters for EY, said that as of January 1, UK accounting and auditing qualifications would no longer be recognized in the EU.
‘We will no longer be able to send audit partners with UK audit qualifications to sign audit reports abroad, which means the quality of audits will be a bit lower, if the better no one who could have given this audit opinion is a Brit, ”she told the BBC.
“If I want to practice in Italy, Germany or Spain, I would have to re-qualify, which would mean passing horrendous exams and, worse yet, three or more years of professional experience.”
Despite these concerns, the trade deal is expected to pass easily through the Commons after Labor leader Keir Starmer announced last week that his party would support the plan, saying it was better than the prospect of no deal. .
Phantom Chancellor Anneliese Dodds said on Sunday that support came with many caveats.
“Businesses have been through so much, the last thing they need now is more legal uncertainty,” she told Sky News.
“But that’s no big deal. This is not what the Conservatives promised, but Labor will not stand in the way of the implementation of these measures. They are needed now. Businesses are calling for as much certainty as possible in these difficult times. “
A Labor MP who opposes Starmer’s move said they expected relatively few of the resignations planned by shadow MPs in Wednesday’s vote.
“I think a lot of them feel that Keir is making a mistake here,” the MP said, saying some even thought it could cost Labor the next election. “But that’s his mistake and years later. The pain of resignation is immediate, so they’ll roll with it.
The Scottish National Party confirmed on Sunday that its MPs will vote against what it called ‘Boris Johnson’s extreme Tory Brexit’ next week, saying the deal strengthens the case for Scottish independence.
On the conservative side, MEPs from the influential Brexit-concerned European Research Group (ERG) have yet to deliver an official verdict, with some legally qualified MEPs and others from the organization studying the deal.
However, some MPs associated with the group told the Guardian that they did not expect the ERG’s so-called “star chamber” to uncover elements the group would vehemently oppose, and therefore expected any conservative revolt to be minimal.
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