Biba chief executive considers the implications of leaving the EU
Sat at home last Sunday lunchtime reading the papers (as is the norm in the White household on a Sunday) with music on in the background, my concentration was snapped by that old reggae favourite – Jimmy Cliff’s “There Are More Questions Than Answers”. Unable to regain focus on the papers I started to go over in my mind again the result of the referendum and its consequences for our broker members.
Broking firms had told us that to be in the single market, with passporting rights was very important to them and the early messages post-referendum coming from the entire financial services sector repeated this. But how is this going to sit with freedom of movement which, as far as we understand it, goes hand in hand with entry into the single market from a European Union perspective? Indeed in a German Parliament meeting on Tuesday, Chancellor Merkel emphasised that there are no rights without obligations. In order to enter the single market there has to be free movement (of humans, goods, services and capital).
If the UK leaves the single market then what happens to the plethora of European directives and regulations? We are led to believe that EU regulations will be able to be banished, but as directives are transposed into national legislation, the Government will be able, if it chooses, to repeal the various pieces of legislation, either in part or in total. But what appetite will it have for such an exercise when its focus will be negotiating new trading agreements? It would be naive of us to think that wholesale removal of directive-driven rules was on the cards!
Looking at the regulations that affect the insurance sector, it is widely expected that Solvency II will remain in place, from both a cost of implementation perspective and, more importantly perhaps, from an equivalence perspective – the UK would surely want to be able to demonstrate to others that its insurer solvency requirements were at least the equal of universally-agreed best standards?
As the week has started the list of questions grows but one thing is quite clear – it is very much “business as usual”. The FCA was quick to point out that the UK remains in the EU until such time as an exit has been formally agreed and put into effect and, in the meantime, all the rules and regulations from the EU which the FCA has implemented remain in force. This message was very much at the forefront of the discussions we had with Andrew Jones MP, Minister at the Department For Transport today and one that we are now repeatedly hearing.
The process of ‘brexiting’ will take time but negotiations will start as soon as Article 50 is triggered. Biba is gearing up for this process to help ensure our members’ interests are protected as best we can – and for us, protecting members’ interests is very much ‘business as usual’!
Steve White is chief executive of Biba