Banks consider paying for EU access

Banks consider paying for EU access

Banks and financial firms are prepared to consider helping the government pay for access to the single market.

Such firms can sell financial products and services throughout the EU from the UK using a financial “passport”.

That freedom will end after Brexit.

However, several sources have told the BBC that if the government decided to pay into the EU budget in return for providing barrier-free access to the EU, they would reluctantly consider making a contribution to that payment.

The so-called “pay to play option” has so far been been ruled out by government and downplayed by industry. It would be politically unpalatable to continue making payments to the EU and would add extra expense for business.

However, finance industry sources said that while any extra cost would make the UK less competitive, losing frictionless market access to the world’s largest trading block – or having to fragment their operations throughout Europe – could be worse.

“We’d have to look at the detail, but it’s possible,” said one insider.

“We would look to support the UK government in negotiations and if part of that meant some sort of financial contribution we’d consider it,” said another.

Dangerous precedent

Publicly, finance industry groups have been loathe to raise this option for three reasons.

First, they think it effectively penalises successful exporters – the opposite of what the government purports to want.

Banks consider paying for EU access

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Second, they believe agreeing to pay for admission sets a dangerous precedent for trade deals with new partners.

Third, they think other industries such as car manufacturing and pharmaceuticals should be asked to do the same and suspect the complexity of divvying up any bill would be mind-bogglingly complex.

The government is clear the UK should not have to pay to get what we already have for free – and for something the EU also values.

A Downing Street spokesman told the BBC: “The position hasn’t changed – we are not going to pay for market access. There is a lot of mutual self-interest at stake here. If you listened to EU briefings last summer then the breakthrough we achieved in December was impossible. This is a negotiation.”

Nevertheless, financial services chiefs have made clear there is a big potential cost to losing access to the EU. If the price for keeping it is right, some think it might be worth paying.

Source: BBC News

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