Theresa May’s “hard facts” and five foundations have been welcomed by the ABI and CII

Theresa May set out five foundations for the UK’s future relationship with the EU in a speech at Mansion House last Friday.

She began by calling for reciprocal binding commitments for fair competition, which are “part and parcel” of any trade agreement.

May urged for a completely independent arbitration mechanism.

The prime minister wants an ongoing dialogue and for EU and UK regulators to continue to work together post-Brexit.

She said the task “is maintaining that trust, not building it”. She called for a “collaborative, objective framework that is reciprocal, mutually agreed, and permanent” for the regulation of financial services.

Next, she argued for an arrangement allowing a free flow of data, saying that the UK already has “exceptionally high standards” of data protection.

In addition, May said it was vital that the “links between our people” were maintained after the split and the UK’s exit from the single market, in order to “drive growth, innovation and enterprise”.

“We need to look beyond the precedence and find a new balance,” the prime minister insisted, continuing to say that an “off the shelf model” would not be appropriate and the EU needed to face the “hard facts” of this.

She explained that she did not see a model like that in place between Canada and the EU, or alternatively Norway and the EU, as appropriate for the UK.

May added: “I want the broadest and deepest possible partnership, covering more sectors and cooperating more fully than any free trade agreement anywhere in the world today.”

Insurers welcome May’s speech

The content of May’s speech was welcomed by the ABI and the Chartered Insurance Institute (CII).

ABI director general Huw Evans commented: “The prime minister’s speech marks a welcome change of approach to EU citizens whose contribution to the UK financial services sector is significant. If we want to remain a world-leading centre for insurance, we have to be able to attract talented professionals to work here.”

CII managing director of engagement Keith Richards said: “The Prime Minister’s clarification of some of the ‘hard facts’ of what this future economic partnership with the EU in relation to financial services will entail - that passporting will end as it is intrinsic to the Single Market that the UK is leaving, and that the City of London cannot simply become a ‘rule taker’ without having a say in how future regulations are shaped - is welcome.

”We’re also encouraged by the Prime Minister’s determination that financial services must be part of the trade agreement with the EU on terms broader ‘than ever before’.”