Despite the fact MPs voted overwhelmingly to seek an extension to article 50, widespread uncertainty remains for the UK’s financial services sector, with a no-deal scenario still very much a possibility.
MPs voted in favour of an extension to article 50 by 413 votes to 202, a move that would delay the UK’s exit from the EU if approved by government, and ultimately the EU.
In response, Jennette Newman, partner at Clyde & Co and President of the London Forum of Insurance Lawyers (FOIL), commented on Parliament’s vote.
“An extension to Article 50 would provide some breathing space to London market firms, but it does not provide much needed clarity over the future trading relationship between the UK and the EU and doesn’t prevent no deal.
“London market firms should begin to turbo charge their contingency plans for all possible outcomes, whilst we to see how negotiations pan out with the EU.”
Industry reports suggest that the large majority of insurers, reinsurers, and intermediaries have put in place measures to ensure continuity for clients post-Brexit, with numerous new European branches being launched in a range of remaining EU domiciles.
Huw Evans, Director General of the Association of British Insurers (ABI) also commented on the vote, and also underlined continued uncertainty.
“This is really the only choice available given the amount of time left and the economic damage a no-deal Brexit would cause, but we should be under no illusions about the continued uncertainty an extension creates. Should the EU agree to it, this extra time must not be wasted. There would be no second chances in June.”
If approved by government and the EU, it’s hoped that the UK’s departure from the EU will be delayed until at least June 30th, 2019. However, a severe lack of clarity has been evident throughout Brexit, and there’s little sign of things becoming any clearer anytime soon.