Parliament Street’s Director of Financial Services, Tim Focas, exclusively reports on Nicky Morgan’s comments earlier this week at TradeTech in Paris.
Staunch Europhile and former education secretary Nicky Morgan has reassured the European financial sector that there will be EU transitional agreements to avoid the UK economy from falling off a so called “cliff edge”.
Speaking exclusively to over 1,000 of Europe’s most senior finance professionals at TradeTech in Paris this week, Morgan deviated from the government’s hard Brexit line, but was unable to confirm how long the transitional period would be. She did, however, state that the timeframe would have to be managed to in order to “meet political expectations.”
Morgan, a frequent critic of the PM’s Brexit position since being ruthlessly sacked from her cabinet position last year, also called on UK financial execs to stand up for their industry in the negotiations.
“For those based in London, I hope you are in regular discussions with both the treasury, and the department for Brexit to try and secure a bespoke agreement to ensure unfettered access to the Single Market” said Morgan.
The one-time treasury minister also spoke out on the complex issue of passporting, which enables UK financial firms to carry out business across borders. A former City lawyer, Morgan claimed that country equivalent passporting rules simply wouldn’t give the same level of access.
She went onto say: “A bank may be able to rely on provisions under MiFID II to carry out certain investment activity, but it could not carry out other services because the relevant legislation underpinning the Capital Requirements Directive does not include equivalence provisions.
“The third country provisions are unreliable because financial regulation is liable to change, and as EU legislation evolves the UK would have to adapt its own legislation to remain equivalent. This leaves the UK rules vulnerable to political influence because the European Commission has a role in deciding whether a country is equivalent or not.”
In a speech largely dominated by remain rhetoric, Morgan did admit that the economic impact of Brexit forecasts produced by the Treasury have “not come to fruition.” In a rare note of support for the PM, Morgan did swerve back on to the party message in a brief election pitch to delegates.
“Out on the doorsteps, I have to say things are looking positive for the Conservative Party and Theresa May is deemed to be a strong asset. And this election, perhaps more than others, is about leadership as the UK exits the EU.”