The Director of the UK in a Changing Europe warned UK Governments have failed to concentrate on the importance of the financial services sector in the UK when engaging with the EU since the beginning of the Brexit negotiations. Mr Menon argued that since Theresa May focussed her attention on the Northern Ireland issue, successive Governments have given little attention to the services sector in favour of goods and tariffs issues.
He said: “The issue with services is that it runs smack bang in the face on the two most totemic political imperatives of this Government: freedom of movement and taking back control of our laws.
“Because unlike with goods, with services it isn’t about tariffs, it’s about your regulations and your laws.
“And cooperating on services is about getting each side to limit its own freedom of movement when it comes to its laws.
“Now, as David Frost himself said, the whole point of Brexit is that the EU doesn’t tell us what to do with our laws.
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“If that’s the case, it strikes me that it becomes very, very hard indeed to strike any kind of deal with services.”
He added: “It is absolutely staggering, it seems to me, that since Theresa May first started thinking about her Northern Ireland backstop, successive Governments have given so little obvious attention to what is 80 percent of the British economy: the services sector.
“They have been quite willing to focus on goods, to focus on tariffs and not actually putting work into sorting out services trade with the EU.”
It comes as Prime Minister Boris Johnson will resume Brexit talks in Brussels next month, the Times newspaper reported on Thursday.
In a letter to the Westminster leaders of the SNP, Lib Dems, Plaid Cymru, SDLP, Green Party and Alliance Party, Mr Barnier said the option of an extension to the Brexit transition period is available if the UK wants it.
But French Foreign Minister Jean-Yves Le Drian said that Brexit talks, which have resumed following an interruption caused by the coronavirus crisis, were not going well.
“The resumption (of the talks) is going badly, deep differences remain,” Le Drian told a French Senate hearing.
The United Kingdom left the EU on January 31 but the main terms of its membership remain in place during a transition period until the end of this year, allowing it time to negotiate a new free trade deal with the bloc.