Top stories

  1. Brexit deal reportedly reached on financial services
  2. Government launches Serious and Organised Crime strategy
  3. New home registrations reach 11-year high

Stat of the day

£37 billion – The cost of serious and organised crime to the UK each year, up from £25 billion five years ago, according to the National Crime Agency

Brexit deal reportedly reached on financial services

The Times (p14, £) reports that a “tentative agreement” has been reached that could give UK financial services companies continued access to European markets after Brexit. The newspaper reports that under the potential agreement, neither side could unilaterally deny market access without first going through independent arbitration and providing a notice period significantly longer than the current 30 days. A UK government official quoted by Reuters said that “we are making progress,” adding that the financial services deal would be based on the EU’s existing so called equivalence system. Thomas Moore, investment director of UK equities at Aberdeen Standard Investments, told the BBC’s Today programme (online only) that the granting of equivalence “produces much greater certainty, not just for financial companies”. UK Finance recently published a Brexit Quick Brief’ offering practical recommendations for how an enhanced form of equivalence could be achieved while respecting the sovereignty and other objectives of each side.

Brexit Secretary Dominic Raab has suggested that a Withdrawal Agreement with the EU could be reached as soon as 21 November, in a letter to MPs on the Exiting the EU Select Committee (The Guardian, p10). There are hopes that a deal could be signed off at a potential special summit of EU leaders which could be held on November 17-18, but EU diplomats played down the prospects of an imminent breakthrough and suggested that more time is likely to be needed to resolve outstanding issues (Financial Times, p2, £). According to a diplomatic note seen by BuzzFeed (online only), the EU is still waiting for the UK to set out its solution to avoiding a hard border in Northern Ireland.

Meanwhile, Chair of the Treasury Committee Nicky Morgan has warned that it could take decades for the UK to work out its financial services regulatory relationship with the EU after Brexit (CityAM, p7). It comes as research compiled by PwC for the Financial Times (online only, £) has analysed the generous tax breaks being offered by EU countries such as France and Italy in a bid to attract financial services jobs from the UK.

Government launches Serious and Organised Crime strategy

The government has launched a new Serious and Organised Crime strategy today, including £48m of investment in law enforcement capabilities in 2019/20 (Sky News, online only). The strategy will include new specially trained police to improve and coordinate fraud investigations, more officers at the National Crime Agency to identify and seize criminals’ money and extra investment in data and intelligence assessments. It is also expected to set out proposals to crack down on estate agents, high street solicitors and accountants who facilitate money laundering but fail to report suspicious activity (Daily Telegraph, online only, £).

Security Minister Ben Wallace will be giving a speech today in London to launch the strategy, alongside Lynne Owens, Director-General of the National Crime Agency and Bob Wigley, Chair of UK Finance. In an interview with The Guardian (p1), Wallace said that banks had more to do but were willing to play their part in the crackdown. He added that: “Post-Brexit, if we’re going to make Britain and the City of London successful then it has to have a reputation for cleanliness and security.”

New home registrations reach 11-year high

Some 43,578 new homes were registered across the UK between July and September —the highest total since the third quarter of 2007, according to the National House Building Council (NHBC) (Press Association, online only).  The number of homes being registered was also 15 per cent higher than in the third quarter of 2017. The figures were boosted by a number of large developments in London, according to the NHBC, with new home registrations in the capital increasing by 141 per cent to 6,007 (The Guardian, p37). Meanwhile a report by JLL, a real estate company, has forecast a significant increase in high-end house prices over the next five years, provided a Brexit deal is achieved (CityAM, p3).

Latest from UK Finance

The ICO recently consulted on some fundamental principles to inform its development of a ‘regulatory sandbox’. Walter McCahon explains more.

News in Brief

The Financial Times (£, p16) notes that Italian banks are under the spotlight ahead of EU-wide stress tests of banks’ balance sheets on Friday. Italian banks are the main holders of the country’s sovereign bonds, whose yields have increased due to ongoing uncertainty about the viability of the Italian government’s proposed budget.

Kevin Brady, who chairs the Ways and Means Committee in the US House of Representatives, has labelled proposals in the UK Budget to tax large digital firms as “troubling”, and warned that the US may take retaliatory action (Daily Telegraph, £, p10).

The UK has dropped two places in the World Bank’s annual ranking of countries by “ease of doing business”. The UK now ranks ninth in the world in the index (Daily Telegraph, £, B1).

The Times (£, p38) reports that savers may be being overtaxed by an average of £2,000 on lump sums withdrawn from their pension pots, because HM Revenue & Customs is imposing an emergency tax code on them.

What the commentators say

Bob Wigley, Chair of UK Finance, writes in the Daily Telegraph (p22, £) that more action is needed to combat organised crime and disrupt the flow of criminal cash. He argues that the launch of the new Serious and Organised Crime Strategy, announced today, will help address this. The strategy is a collaborative effort between government, industry and regulators to disrupt and detain serious crime.

Wigley concludes by emphasising UK Finance’s continued commitment to combating organised crime, alongside government and law enforcement, adding that the new crime strategy will rightly raise the bar.

Andrew Clarke, COO of Labour in the City, argues this morning in CityAM (p20) that companies must stand for something more than profit, such as sustainability and a lasting contribution to society. Clarke notes that in a recent poll, 72 per cent of people felt the banks should have faced tougher penalties following the banking crisis and that only through taking a more pro-active, socially conscious approach can banks improve their public perception.

Calendar

  • Home Office launches Serious Organised Crime Strategy
  • TheCityUK publishes ‘Splitting the Bill’ report on the role for shared platforms in financial services regulation
  • Bank of England inflation report and interest rate decision

For a full list of upcoming UK Finance statistics releases, please click here.

News in brief – 1 November 2018