• Dr Gerard Lyons

The Telegraph covers my paper for Policy Exchange

Johnson told to 'go into battle' for the City after Brussels power grab

PM's former chief economic adviser calls for new post-Brexit financial services strategy after policy of 'neglect'

ByTom Rees, 21 May 2021

Ministers must “go into battle” for the City and stand their ground over an attempted power grab by Brussels over financial services, Boris Johnson's former economics adviser has said. In a Policy Exchange report Gerard Lyons, a senior fellow at the think-tank and an adviser to the PM when London mayor, warned that the City of London is up against “an aggressive EU and intense global competition” and that the UK should diverge on regulation from Brussels if needed.

Mr Lyons urged ministers to adopt a new post-Brexit strategy for financial services to boost the City’s competitiveness and drive the levelling up agenda.

The City was largely left out of the UK's post-Brexit agreement struck with the EU in December, but both sides signed a memorandum of understanding on financial services cooperation in March. The agreement raised hopes that Brussels will grant UK companies so-called equivalence status, where Britain's rules are deemed to be so similar to the EU's that cross-border trading is fair to both sides.

Mr Lyons said: “The City has suffered from benign neglect, and now needs the Government to go into battle for it.

“I outline a strategy with two over-riding aims. One is to ensure the City plays a lead role in rebalancing the economy and delivering strong, sustainable growth. The second is to take immediate steps to bolster the City’s competitiveness.”

The report proposed a suite of policies to boost the Square Mile, including diverging with the EU on regulations; examining new financial services hubs across the country; and tackling the funding gap facing smaller firms.

It also called for a re-examination of rules, such as Mifid II and Solvency II, and the creation of a new Parliament committee focused on financial services legislation.

Lord Frost, the UK’s chief Brexit negotiator, said this week the City needs to "get on and do its own thing” as jobs, trading and operations slowly trickle out of London. Meanwhile, top Bank of England officials have also argued that the UK must not become a rule-taker to secure equivalence.