Theresa May Delivers "Real Blow" To UK Banks In Brexit White Paper

After a handful of her political allies quit their posts to express their dissatisfaction with a Brexit plan agreed to last week that was widely seen as too soft, this morning - and just hours before Donald Trump's arrival - UK Prime Minister Theresa May released a long-awaited White Paper outlining her government's approach to Brexit, entitled "The Future Relationship Between The United Kingdom and European Union" (link).

Critics assailed the paper for proposing to keep the UK closely tied to the EU single market. The plan is essentially a proposal for a new "UK-EU free trade area" with closely linked customs regimes to ensure there are no tariffs. However, the UK services sector - most notably its banks - would suffer significant disruptions thanks to the "regulatory freedom" envisioned by May.

More notably, the White Paper revealed that May has accepted that the UK's banks will need to leave the European banking union. Instead, she's set her sights on "regulatory equivalence" agreements with the EU that have applied to countries outside the trading bloc. While UK banks would lose their unfettered access to EU markets, May hopes that a new "treaty-based" process would allow them to achieve an enhanced version of equivalence where the EU would commit to maintaining long term access for UK banks.

"This new economic and regulatory arrangement would be based on the principle of autonomy for each party over decisions regarding access to its market," the paper said.

The policy chairman of the City of London, where the UK's financial sector is based, said the proposals outlined in the White Paper would be a "real blow" to the UK banking sector. Looser ties to Europe would mean the financial and professional sector won't be as able to create jobs and support growth across the wider economy.

Additionally, the white paper proposes that the UK continue to abide by the EU’s common rulebook for regulation and product standards for goods, to protect "just-in-time" supply chains.

May proposed a joint EU-U.K. committee to determine whether an EU rule change would apply to the association agreement. UK parliament would then have the right to decide to continue to abide by EU rules "recognizing there could be proportionate implications" for trade between the two if MPs rejected it.

The proposed relationship would require continued close cooperation with the EU, including “regular dialogue between U.K. and EU leaders.” The white paper acknowledges that as the arbiter of the EU’s regulations, U.K. courts must make reference to the European Court of Justice, but stipulates that an independent arbiter should settle any disputes between the U.K. and EU.

Of course, there's no guarantee that the EU will accept her proposals, however if the UK pushes back hard, the most likely outcome would be a hard Brexit as May's cabinet will likely topple.

The EU has said all along that "mutual recognition" of each side's financial regulations would be unacceptable due to Britain's unwillingness to adhere to the rules of the single market. May's proposals for a post-Brexit immigration regime would be set out in more detail in another white paper to be released later this year.

Read the full white paper below:

 

Comments

OverTheHedge Four Star Thu, 07/12/2018 - 10:19 Permalink

For those who didn't click on your link:

Two outcomes that remain are the UK leaving in name only and adopting a bad deal like Norway or Switzerland, or the UK leaving with a trade deal that doesn’t cover its financial industry. Neither option is likely to thrill the British but exports to the EU only represent about 10% of the UK’s financial and insurance service industry revenues. The UK exports nearly as much in financial services to the US as the entire EU. When push comes to shove it is hard to imagine 10% of financial services revenues taking priority over the country’s sovereignty.

In reply to by Four Star

NEOSERF Thu, 07/12/2018 - 09:18 Permalink

What a cluster...Greece ironically should be the first country that gives the EU the middle finger and gets out while defaulting on the remaining $300B they owe.

Fiscal Smegma Thu, 07/12/2018 - 09:19 Permalink

"Presented to Parliament by the

Prime Minister by Command of Her Majesty"

 

Now that's some funny shit. Sounds like they need a Majexit while they're at it. LOL

adonisdemilo Thu, 07/12/2018 - 09:22 Permalink

May and her Europhiles will hand the Government to Jeremy Corbyn. He will immediately demand across the board re-nationalization which is incompatible with the EU doctrine. We will have to leave the EU for his Government to stick to its mandate.

Unfortunately the Tories have shot themselves as a group instead of shooting the traitors one at a time.

You can thank the Tory traitors for the next generation, or two, for the wrecking ball that's about to hit the UK. 

 

Ink Pusher Thu, 07/12/2018 - 09:28 Permalink

Time for a proverbial 'regime change' in the UK.

"It is difficult to go anywhere in London without having the feeling that Britain is now Occupied Territory."

~George Orwell

 

Catullus Thu, 07/12/2018 - 09:46 Permalink

We need to leave the EU, but we need to follow all of its rules. This is international cuckoldom. 

Just keep the open trade with the EU. It hasn’t hurt Switzerland. In fact, there’s major capital flight into Zurich from the EU. You’re not going to lose access to their finance system. The BOE is still a legit CB. Just drain France and Germany of capital. 

WTFUD Thu, 07/12/2018 - 09:50 Permalink

She's got it, baby she's got it, i'm your Venus, suck my penis, your desire.

May's hanging on in there, to POWER, with one testicle that's ruptured.

tunetopper Thu, 07/12/2018 - 09:56 Permalink

I just read the part of this agreement that matters most to the EU.  It falls short of the goal....to allow the EU access to monitor suspicious account activity in the UK's Offshore Crown Territories. ie Tax Havens. 

 

Make no mistake, that is the Golden Egg here folks. 

 

I seriously doubt that the Queen/Crown will step aside and let the EU bureaucrats take a peek into Barclays, Standard Charter, Lloyds, RBS, HSBC, and the Bermudian Insurance Cos... not to mention all the Canadian and Australian banks operating in these waters.

jm Thu, 07/12/2018 - 10:12 Permalink

Hard Brexit, pay them nothing. 

Cut corporate tax rates to retain the jobs that the EU is counting on poaching.

Eliminate trade barriers with every country. Negotiate bilaterally with Ireland and every other country that you choose.

Go to the WTO when the EU puts up their walls.

Scaliger Thu, 07/12/2018 - 10:36 Permalink

"The European Banking Union" sounds like the greatest Risk-Group per GIPSI countries,
which are bound to collapse the Eurozone sooner than later.

tIt is The abominable abyss, per Frankfurt bankers themselves.

falak pema Thu, 07/12/2018 - 11:14 Permalink

The Duck's Protectionist #Maga doctrine now raging rampant plus Brexit divorce from Eurobor market means LIBOR and EUROBOR servicing die in City.

Goodbye Hayek and your road to bankster imposed serfdom that killed the social compact of the West, opening the floodgates of financialized leadership built on the Anglo-US handshake of Maggie's bigbang tied to Reaganomics's hold on the  world; post BW revoke and subsequent Eurodollar City  hegemony. 

Say goodbye to all that now as May melts like snow under the mid-day sun, when only mad dogs and Englishmen venture out to face the hounds of Asian pivot.

And they came back empty-handed like the soccerbots of England.

Desslok17 Thu, 07/12/2018 - 11:27 Permalink

HARD BREXIT!!!! Why are you kowtowing to that witch Merkhell? remember when the Brits were tough as nails? Now the Brits and the Germans act like kucks.

smacker Thu, 07/12/2018 - 12:19 Permalink

Article: "The proposed relationship would require continued close cooperation with the EU [...]"

So, for a continued ((close relationship with the EU)) (which would certainly include the EU continuing to lay down the UK law/rules/regs in important areas with little or no input from the UK), T May is willing to shell out GBP £39 billion to Brussels as an EU departure tax?

That sounds like a great deal to me. For Brussels, not for the UK.
It leaves the UK as a semi-detached EU member but without a voice.

Where's the meat May?

A much better arrangement for trade between the two sides is to establish the rules/regs at the outset and to make any proposed changes to those rules subject to mutual agreement, not simply subject to dic-tat from Brussels.

The proposal as it stands is like a contract which can be changed at will by one party without the need for agreement from the other side.

FringeImaginigs Thu, 07/12/2018 - 14:24 Permalink

The last time I was worried or concerned or firghtened about banks ability to restructure themselves so as to best fuck screw and otherwiser minorly abuse, scam and defraud the rest of the world and in particular the average guy on the street was... Never.

Dekker Thu, 07/12/2018 - 16:22 Permalink

FYI the banking union is only for eurozone countries (or those that voluntary joined, which no one did). The UK banks are not leaving it. However you could say that UK banks are leaving the EU single rule book :).

fiddy pence ha… Fri, 07/13/2018 - 09:24 Permalink

after 2 years of fucking about, the

UK government has been taken

over by the banks. The banks want

access to the EU, or else they'll leave

the UK. The UK is nothing but a

tourist trap without the banks.

The only institution that will be

saved from losing from brexit (or whatever

ends up happening) is banking. It

shows you simply who is really

leading the UK.

Apparently, everybody else in the

UK can fck themselves forthwith.