The City’s policy chief says the prospect of a “worst case scenario” is fuelling work to broker a Brexit deal that meets both British and EU interests.
Speaking after government’s financial services paper – which outlined the prospect of a no-deal divorce from the EU – was published on 23 August, Catherine McGuinness explained that City lobbylists “will continue to press for a new relationship that will be good for households and businesses on both sides of the Channel”.
The paper, which appeared alongside 23 similar documents outlining no-deal plans for everything from healthcare to farming, stated that individual and business customers of UK-based payment services should be braced for “increased costs and slower processing times for euro transactions”.
It also noted that a ban on surcharges for cross-border transactions, an EU directive, will cease to exist, potentially leading to a rise in business operating costs.
However, Ms McGuinness was pleased to at least have a clearer indication of how the landscape could look post March 2019.
“Today’s paper demonstrates how the UK is putting in place measures to protect against negative impacts in a no-deal Brexit scenario for UK based customers and businesses, including EU firms doing business here. It is clearly over to the EU now to do the same.
“We welcome the recognition of the pressing need to find workable solutions to cliff edge issues, including contract continuity. This underlines the need for a deal that seals a transitional period which will give business the certainty it has been calling for.”
On the trade front, government said that both import and export declarations will be mandatory on goods crossing the border, and that Eurotunnel, airlines and shippers will all require their own additional safety and security declarations.
In the last five years the EU’s financial exports to the UK have increased by 51% while the UK has increased its exports to the continent by 35% – figures that Ms McGuinness says “reiterate how vital it is that strong trade ties are maintained”.
She added a word of warning to her EU counterparts as negotiations continue to heat up.
“The clock is ticking – there are just over 200 days until Brexit. It’s time the EU clarifies how trading arrangements might continue post-Brexit and takes steps to reciprocate the action taken by the government and UK regulators; if the EU fails to do so it’s not just the UK this will affect, it will harm EU businesses and consumers too.”
Main image George Hoden (Creative Commons).