Tory MP Jacob Rees-Mogg has said we ‘shouldn’t get too hung up’ on the importance of passporting rights for financial services firms within the Brexit negotiations.
Current passporting rules allow banks and other financial services companies who set up their operations in the UK to access the EU market.
A report published today by consultancy Oliver Wyman and lobbying body The City UK said that if the UK lost its passporting rights up to 35,000 jobs could be at risk, as well as around £5 billion in tax revenues.
However speaking with New Model Adviser® at the Conservative party conference, Rees-Mogg (pictured) said: ‘The importance of passporting is much over-rated.’
This over-emphasis on passporting was because most of the City is in wholesale rather than retail banking, he said.
‘The real advantage of passports is in retail and most of the companies that are involved in retail markets have a person in other European countries anyway. So I would not get too hung up on passporting. Last week Lloyd’s of London said it was 4% of its business, so it’s not that big a fish.’
When asked why the EU would give the UK passporting rights as part of the negotiations, Rees-Mogg said it has given similar deals to Singapore and the USA, so it would be in line with its policy.
He added the reason the FTSE has done so well since the Brexit vote, was because the fall in the pound has ‘acted as a natural stabiliser’.
Rees-Mogg was also not concerned about the effects of an even weaker pound.
‘If the pound fell to lower levels then it would rebound as people looked at the UK and wanted to buy assets and so on. I don’t think the government or the Bank of England should have particular targets for sterling.’