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Economic Secretary John Glen refused to confirm whether an agreement on access to the EU for financial services was likely to be done before the end of the year. A decision on the matter is not directly linked to the EU free trade agreement negotiations but was understood to be likely coupled to the talks.

However, giving evidence to a House of Lords select committee earlier today, Mr Glen refused to rule out discussions on the so-called “equivalence” matter continuing into 2021.

The Salisbury MP said he “can’t say what the outcome will be” when directly asked if there was a risk of financial equivalence turning into “an on-going negotiation, bit-by-bit, day-by-day, for the foreseeable future”.

Both sides must strike an agreement for continued access to each others finance sectors.

On November 9 Chancellor Rishi Sunak said he was unilaterally giving EU financial firms access to the UK from January in order to help maintain Britain’s place as a a global financial centre.

The EU is yet to make its position clear and might not do so until after talks between Michel Barnier and David Frost on a free trade agreement have ended.

Giving evidence to the parliamentary committee this morning, Mr Glen said he would not speculate on the European Commission’s position or the outcome of trade negotiations.

However, he did strike an optimistic tone that an equivalence agreement would be struck by the end of the year.

He said: “We have co-operated fully with that process and completed all the forms the European Commission requested.

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“They haven’t come back with any questions on that and that was four or five months ago now.”

Despite this, he admitted the timeline of the agreement was “a matter for the Commission” and could not guarantee a deal by the end of 2020.

He added: “At these final stages very near the end of the transition period I would like to reserve comment on some of these issues.”

It leaves the possibility of the UK and EU failing to agree reciprocal arrangements on financial services before the end of the transition period and the continuation of talks into the new year.

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Mr Glen promised to continue to do all he could to secure access to the EU for financial services.

“I can tell you we will continue to take the most constructive approach to dialogue with the EU and be as forward-leaning as we can with the decisions we take of our own volition,” he said.

“What I do see is a considerable resilience in the City of London with respect to the future and the desire to stay in London.

“I know from industry actors there is considerable appetite for that continuing engagement to resolve outstanding matters and we will continue to do what we can to do that.”

Michel Barnier is in London today to continue talks with David Frost as the pair continue to try and thrash out a free trade agreement.

Negotiations have been deadlocked for months now, with issues the so-called “level playing field” and fishing being the biggest areas of contention.

It is believed a deal between the two must be struck this week if there is to be any hope of the trade agreement being ratified before the Brexit transition period ends on December 31.

A decision from the European Commission on equivalence is unlikely to be made public until after talks have concluded.

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