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The Actuary The magazine of the Institute & Faculty of Actuaries

The UK needs a ‘unique trading relationship’ with the EU after Brexit

The UK must seek a unique trading relationship with the EU, as current solutions such as the Canadian, Norwegian or Swiss models are not appropriate, according to MEP Vicky Ford.

There is no 'off-the-shelf' solution available ©iStock
There is no 'off-the-shelf' solution available ©iStock

Speaking at the IFoA’s autumn lecture in Edinburgh last night, the Conservative MEP for the East of England said that the UK must aim for a regulatory relationship with the EU, which focuses on sectors where there is a need for cross-border co-operation.

In addition it was stressed that there can only be one deal with the EU, and that Scotland, or other parts of the UK, cannot be treated differently to the rest.

She said: “We have to bring the country back together behind a long-term vision for the UK's future relationship with Europe and the rest of the world.

“To do this we need a bespoke trading relationship with the EU, there is no off-the-shelf solution available. The UK's economy is too diverse, and its trading links with the EU too sophisticated for us to use the EU's relationship with Norway, Switzerland or Canada as a model.

“A cut and paste of the Canada model does not meet the needs of 21st century industry sectors, such as advanced manufacturing, digital and medical research.

“Our future relationship with the EU needs to focus on areas of cross-border co-operation and consensus. This is not a case of having our cake and eating it, but a pragmatic approach to both our economic interests.

“Achieving a deal which works for the UK and the EU will be very challenging, but this is no time for faint hearts. We have a strong hand to play and must enter the negotiations with ambition, determination and confidence.

“We all, the UK and the EU, need to keep calm and focus on the task in hand.”

Her words came on the same day that the Association for British Insurers (ABI) called for a ‘clear commitment’ to a transitional period following Brexit.

ABI director general, Huw Evans, argued that without this commitment, UK insurers most affected by Brexit could be forced to take decisions to leave the country before a final trading deal is made.

He said: “We call on the government to make a clear commitment that it will seek an early agreement with our European partners on a high-level transitional implementation period, which will help avoid economic shocks to both the EU and UK.

“This is in both sides’ interest, would not be a sign of negotiating weakness and is essential if we are to maximise the smooth running of the financial system after 2019. 

“Without such a commitment there is little incentive for insurers considering relocation to take a longer-term view on whether to press ahead with a decision.”

The ABI have outlined five requests from the government when negotiating their Brexit deal, which include:

Securing a regulatory environment that is appropriate for the UK market

Retaining the ability to passport out of and into the UK

Closely mirroring the EU data protection regime to avoid a quagmire of complexity around how personal and non-personal data is protected

An improved future migration policy that enables the employment of high-skilled professionals from both within and outside the EU

A strong focus on regulatory dialogue and international agreements in overseas financial services markets, especially in India and China.