Ever since the UK referendum vote, the insurance sector has been keenly waiting to see when the withdrawal will take place and what deals, if any, will be secured – particularly relating to passport rights.
Now, a new report by The Financial Times is suggesting that the City of London has ‘given up hope’ of universal access to the EU single market – and is instead searching for a bespoke deal, which, if agreed, would include passporting rights.
The publication reports on teams from across the City of London and Whitehall preparing to present policy ideas to new Prime Minister Theresa May in early September – and that a conclusion has already been reached that the UK emulating the relationship Norway has with the EU would be impractical. Currently, Norway has access to the single market even though it has no say on regulations – it has to make budgetary contributions and accepts free movement of people.
Instead, it is believed that the city will look for a trade deal similar to Switzerland’s with a taskforce reported to be “close to embracing this judgement”.
The Swiss trade deal, of course, gives certain sectors, including life insurance, full two-way access to the single market via a passporting deal as long as regulation is kept at a level that is equivalent to that within the EU bloc.
It is expected, however, that the UK will look for its deal to effectively go further than that of Switzerland as the UK is such a significant export market.
There remains some opposition to following the Swiss model, however, with Xavier Rolet, chief executive of the London Stock Exchange, telling The Financial Times that as European companies rely heavily on access to the UK, it is up to the committee “to look at the impact of the sector on the real economy.” He does agree, however, that it is “critical” for passporting to be maintained.
The official negotiating position of the Government is unlikely to be revealed until the end of the year but informal positions need to be in place by early autumn so that the PM can consult with Northern Ireland, Scotland and Wales, as well as key decision makers in Brussels.
