Nicky Morgan arrives at 10 Downing Street in central London, the UK. Picture: REUTERS/NEIL HALL
Nicky Morgan arrives at 10 Downing Street in central London, the UK. Picture: REUTERS/NEIL HALL

London — Britain would have “fully functional” rules to remain a top global financial centre even if it left the EU without a Brexit deal, MPs said on Tuesday.

They sought to reassure foreign financial firms that a no-deal Brexit would not result in City of London disarray as many banks, insurers and asset managers are already moving staff and operations to new EU hubs.

MPs were due to vote on Tuesday in a bid to end a deadlock over Britain's divorce settlement with the EU and avert a no-deal Brexit on March 29.

EU financial rules are being embedded in British law, but changes are needed to make them work properly as Britain ends control by EU regulators.

Parliament is scrutinising measures known as statutory instruments (SIs) to give ministers and financial regulators powers to largely bypass parliament to push through changes.

Nicky Morgan, chair of parliament's treasury select committee, told Britain's financial services minister John Glen that while the powers showed that finance would be prepared for all eventualities, full parliament should debate them.

“We can understand why the powers are needed but they are unprecedented. Having the SIs in place is an important message to the world,” Morgan said.

Glen said Britain would be in uncharted territory if there is no deal.

“The predominant message I have is that we need to secure a deal. Equally, it would be imprudent and irresponsible not to have a fully functional regime in a no deal situation,” Glen said.

“In the event of a no-deal Brexit, we won't have vast parts of the financial services sector saying ‘well, we didn't know what was happening,’” Glen added.

Andrew Bailey, CEO of the Financial Conduct Authority, and Sam Woods, deputy governor of the Bank of England, said tweaks from the “massive operation” ran to more than 2,000 pages.

Bailey said the powers would only be used to keep the regulatory system “where it is today” rather than make fundamental changes, and the vast majority of changes would be published.