Mr Johnson admitted last week that the UK’s trade deal with the EU “perhaps does not go as far as we would like” over access to EU markets for financial services. Talks for a trading agreement went down to the wire as many feared there would not be enough time to get a deal ratified even if agreed. Mr Johnson appeared to admit to making concessions in his interview with the Sunday Telegraph, but attempted to ease fears over regulatory divergence. There are measures in the agreement for the possible imposition of tariffs if the UK diverges notably from existing standards.
However, Mr Johnson said this should not be viewed by Brexit-minded Conservative MPs as too restrictive.
He said: “All that’s really saying is the UK won’t immediately send children up chimneys or pour raw sewage all over its beaches.
“We’re not going to regress, and you’d expect that.”
The resolution over financial services appears to be one area of the deal where the EU gained the upper hand.
The compromise from the UK Government comes after EU negotiator Michel Barnier warned that the UK’s financial services companies must accept being “rule-takers” observing EU regulations if they want continued access to continental markets.
The hardline message came just days before trade talks commenced.
Mr Barnier said: “I read in the Financial Times recently that London must retain its primacy as a hub for wholesale financial markets without becoming a rule-taker of the EU and European regulation. As a former commissioner in charge of financial services, allow me to question that.
“Why should we accept the profits stay in London while the EU carries the risks?
“The UK may not want to be a rule-taker. OK, but we don’t want to be the risk-taker.
“When the next financial crisis strikes, who will foot the bill? I doubt the UK will foot it for the EU. That’s why the EU must take responsibility for its financial regulation, supervision and financial stability.”
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While MPs are still working their way through the Brexit trade deal – over 1200 pages long – the deal is likely to pass after Labour Party leader Sir Keir Starmer said he would vote for it despite reservations.
But Sir Keir faces a revolt from high profile figures in his party as a result of the decision.
Prominent MPs including John McDonnell and Clive Lewis accused Sir Keir of “falling into the trap of rallying around this rotten deal”.
Meanwhile, the SNP has said it will oppose the deal as Nicola Sturgeon ramps up independence talk.