Government publishes Brexit White Paper

The Government has published its White Paper on building a new relationship with the EU after Brexit. The paper looks at the basis on which the Government wants to address the 12 principles Theresa May set out on 17 January. However, the Government says it has respected Parliament’s wish that it does not publish detail that would undermine its negotiating position. In relation to financial services and markets, the key points are:

  • as we already knew, the Great Repeal Bill will preserve EU law where it stands the moment before the UK leaves the EU, and enable changes to be made by secondary legislation to the laws that otherwise would not function sensibly once it has left;
  • the paper recognises the particular concerns of the devolved administrations and Gibraltar;
  • under the heading “ensuring free trade with European markets”, the Government says it will not be seeking membership of the Single Market, but will look for a new strategic partnership with the EU, including an “ambitious and comprehensive” Free Trade Agreement and a new customs agreement. It says it does not seek to adopt any model other countries currently use, and aims to give UK companies the maximum freedom to trade with and operate within European markets and vice versa. It notes the agreement the UK seeks may take in elements of the current single market arrangements, on a fully reciprocal basis. The paper notes that around 5,000 UK firms currently use various financial services passports, and 8,000 European firms passport in, as well as the various agreements with third countries based on regulatory equivalence. The paper stresses the interest in and need for mutual cooperation; and
  • under other headings, the White Paper also discusses the general appetite for continuing and improving trade and services relationships with third countries, and continuing to work with the EU in the fight against crime and terrorism.

The paper confirms the Government’s wish to avoid a disruptive cliff-edge on Brexit, and the need to phase in new arrangements. The Government will trigger Article 50 no later than the end of March and wants to have reached an agreement about the future partnership between the UK and the EU by the time the 2 year period after notification is over, so businesses can plan for the new arrangements. The paper makes it clear the Government wants a good relationship to continue but it stresses that no deal is better than a bad deal.