Robert Peston explains how Boris Johnson has ‘capitulated’ to EU in Brexit negotiations

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ITV’s political editor took to Twitter to share a question posed by Lord Gadhia in the House of Lords today where he asked whether the UK has abandoned any hope for a “substantive financial services” chapter through a trade deal with the EU.

Mr Peston claimed both the Prime Minister and Chancellor Rishi Sunak have abandoned a financial services deal with the EU.

He tweeted: “This from Lord Gadhia is spot on.

“Rishi Sunak and Boris Johnson have capitulated and seemingly abandoned hope of a financial services deal with EU, and have announced City will be simple rule take from Brussels.”

He then added it was “very odd” the UK has surrendered on financial services despite having a massive deficit with the EU.

Mr Peston continued: “Very odd that UK expends so much political capital trying to get deal with EU in goods, where we have massive deficit with EU, and surrender on financial services, where we have surplus.

“Maybe government thinks the City can thrive in all climates and manufacturing can’t.

“But it feels odd.”

This week, Mr Sunak said financial services will be “essential to our economic recovery” from the coronavirus pandemic.

The Chancellor said Britain wants to “renew” its position as the “world’s preeminent financial centre”.

Mr Sunak told the House of Commons on Monday: “Financial services have been fundamental to Britain’s economic strength for centuries. And they remain fundamental today.

“The vigour and creativity of this industry adds over £130 billion of value to the UK economy; employs over a million people.

“And has been a critical source of revenues to support the NHS through coronavirus, contributing nearly £76bn in tax receipts last year.

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“And let us put paid once and for all to the myth that ‘financial services’ and the ‘City of London’ are synonyms.”

He continued: “Our first task as we write this new chapter for financial services is to give certainty on our approach to regulation after we leave the transition period.

One of the central mechanisms for managing our cross-border financial services activity with the EU and beyond, is equivalence.

“I remain firmly of the view that it is in both the UK and EU’s interests to reach a comprehensive set of mutual decisions on equivalence.

“Throughout, our ambition has been to manage these cooperatively with the EU.

“But it is now clear there are many areas where the EU is simply not prepared to even assess the UK.

“So we need to now decide on how best to proceed.”

Mr Sunak went on to explain how Britain will want a “constructive and engaged” relationship with the EU.

But said it is time for Britain to move forward as a country and “do what’s right for the UK”.

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