British Prime Minister Theresa May has confirmed that Brexit will see the UK lose its EU passporting rights.
In the UK Government’s latest white paper on Brexit, which was released yesterday (12 July), the government outlined its vision of what it seeks to achieve in negotiating the UK’s exit from, and new partnership with, the EU.
May suggested that the long-awaited paper, which has resulted in the resignations of seven government ministers, including two secretaries of state, would “honour the result of referendum” and ensure the UK leaves the EU, without leaving Europe.
The government’s proposed economic partnership would involve new economic and regulatory arrangements, which would not replicate the EU’s passporting regimes.
In the paper, the government recognised that the once the UK has left the EU and the single market, the UK will no longer be able to operate under the EU’s passporting regime, as this is an inherent part of the single market which the UK will no longer be part of.
Without EU passporting rights, insurance companies based in the UK will no longer be able to write business into the European market.
Many financial services companies, such as Lloyd’s of London and MS Amlin, have been preparing for this eventuality by domiciling subsidiaries in European locations.
Dominic Raab MP, secretary of state for exiting the European Union, called the proposed economic partnership “unprecedented”.
Raab said: “The plan would take the UK out of the single market and the customs union.
“It would give the UK the flexibility we need to strike new trade deals around the world,
in particular breaking new ground for agreements in services.”
“It would maintain frictionless trade in goods between the UK and the EU through a new
free trade area, responding to the needs of business.”
Nigel Feetham, partner at Hassans International Law Firm, said it was negative news for the industry.
He explained:“This is not positive news for the City of London or the insurance industry in particular."
"Unfortunately, the whole Brexit negotiations have become embroiled in politics on both sides."
"We are on a collision course for a Hard Brexit that will damage everyone in the end. There are no winners here, including the EU.”
