- UK “increasingly positive” about financial services Brexit deal
- Chancellor emphasises economic growth can cut national debt
- Probate fees to rise under government plans
Stat of the day
£690m – Investment in tech start-ups in the UK in the first six months of 2018, according to new figures reported by CityAM (p2).
UK “increasingly positive” about financial services Brexit deal
Treasury minister John Glen has said he is “increasingly positive” that the UK will reach a deal on financial services with the EU (Reuters, online only). It follows recent reports that broad agreement between the EU and UK has been reached on the wording on financial services that will be included in the political declaration which would accompany a withdrawal agreement (The Times, p40, £). The Financial Times (online only, £) reports on concerns amongst some industry figures that a proposed future trading and regulatory regime for financial services based on the EU’s current system of equivalence would be inadequate. Meanwhile, the FCA’s international director Nausicaa Delfas has given a speechcalling for further action by EU authorities to address cliff-edge risks in the event of a ‘no deal’ Brexit, such as contractual continuity and the transfer of personal data between the EU and UK. She said that 1,300 EEA firms have expressed an interest in joining a proposed temporary permission regime that will allow them to carry on regulated business in the UK for up to three years after Brexit (CityAM, p1).
It comes amid reports the EU is preparing to back a compromise proposal on the Irish border to help reach a deal over the UK’s withdrawal in the coming weeks, according to The Times (p1, £). The offer, which has received the support of Irish prime minister Leo Varadkar, would involve an independent review mechanism on the so-called Northern Irish backstop. This could reportedly address concerns amongst Brexit-supporting ministers that the backstop could lead to the UK being locked indefinitely in a customs union with the EU. The Financial Times (p1, £) reports that the prime minister Theresa May will underline that time is running out to avoid a disorderly Brexit at a meeting of cabinet ministers today, amid hopes a deal could be secured before the end of the month.
Chancellor emphasises economic growth can cut national debt
Chancellor Philip Hammond has suggested that growing the economy is a better way to cut the national debt than running budget surpluses, in comments made to MPs on the Treasury Committee (The Times, p37, £). He emphasised that the target of eliminating the budget deficit by the middle of the next decade has not been abandoned, but called for a “balanced approach” that also takes into account the need to invest in public services and keep taxes low (BBC News, online only). Mr Hammond also warned MPs that a ‘no deal’ Brexit could cause an economic ‘shock’ comparable to ‘the collapse of a banking system (Daily Mail, p10). He added that: “We would need to react to that in the usual way, with monetary policy for the Bank of England and fiscal policy for the Treasury, in order to support the economy to get to a new equilibrium.”
Probate fees to rise under government plans
The cost of securing legal control over a deceased person’s estate could rise from £215 to up to £6,000, under government plans announcedyesterday (Daily Mail, p1). Bereaved families need to apply for probate to administer their loved ones’ finances when they die, and currently there is a fixed fee of £215 – or £155 for families who use a solicitor. The government is proposing to introduce a new banded structure that would link the charge to the size of the estate, with the levy ranging from £250 to as much as £6,000 for wealth estimated at over £2million (Daily Telegraph, p2, print only). Inheritances of less than £50,000 would be exempt – lifting an estimated 25,000 estates a year out of the tax (The Times, online only, £). The proposals have been criticised by charities and opposition politicians who have branded the move a “stealth tax” (The Sun, p2).
Latest from UK Finance
In today’s UK Finance blog post, Simon Hills poses the question: Are the proposed changes to the Definition of Default necessary?
News in Brief
Swift, the international financial messaging system, has said it will comply with restored US sanctions on Iran (Financial Times, p13 £).
Services growth in the UK hit a seven-month low in October, according to the latest monthly IHS Markit purchasing managers’ index (The Guardian, p31)
The Daily Telegraph (B8, £) reports on concerns about growing corporate debt in China, remarking that the country’s banking regulator has described the situation as “grim and complicated”.
EU finance ministers are due to discuss plans to introduce a levy on digital sales amid growing divisions over how to extract higher taxes from the sector, reports The Times (p45, £).
What the commentators say
Andrew Shikiar, Chief Marketing Officer of the FIDO alliance, writes in this morning’s City AM (p26, print only) that as the internet approaches its 50th anniversary, passwords remain its key compromising weakness, with over 2.3 billion passwords stolen in the past year. For Shikiar, this can be addressed by using improved methods of authentication such as biometrics and cryptographic security keys. He concludes that stronger authentication techniques have the potential to greatly enhance the security of banks and financial services firms, as well as providing greater protection for consumers.
Robert Shrimsley, a columnist for the Financial Times (p13, £), argues that the UK’s role as an indispensable world player will be undermined by its exit from the EU. He believes that the UK has gained much of its influence and global clout from being a big player in the EU and this status will now have to be revaluated. He adds that Britain’s new trade deals will not help, as the US and former commonwealth nations are unlikely to give the UK any special favours. Shrimsley concludes that Britain’s global significance post-Brexit will be a strong reality check for its politics and media.
- UK Finance to host its Annual Mortgage Conference in the City of London
- Theresa May chairs a cabinet meeting focused on Brexit – 9.30am
- Treasury questions in the House of Commons – 11.30am
- House of Commons rises until 12 November (EOB)
For a full list of upcoming UK Finance statistics releases, please click here.