Passport

The man who may well be the next President of France has spoken words that should put fear up many financial firms in the City, while the European Commission is considering a rule change that may be disastrous for Brits travelling in Europe.

There are two arguments that largely got overlooked during the EU referendum campaign.

First of all, in the debate about trade and about how the UK could rapidly agree new trade deals post-Brexit, few people mentioned that it is much harder to agree trade deals regarding services, especially financial services – and that in any case, countries often apply much more protectionist policies to finance.

Secondly, it seemed to get forgotten that free movement of labour works both ways, that it benefits Brits who live abroad, work abroad, or plan to do so in the future. It also makes life easier for holiday makers.

Now the EU commission is reportedly looking at bringing in rule changes – to help security within the Schengen area – to operate a visa programme applied to travellers from outside the area, with non-Schengen area EU members entitled to a waiver. But will such a waiver apply to the UK? Well if it leaves the EU, and wants to change rules on the migration of people into the UK from the EU, it can’t really expect unencumbered access to the EU. And on that theme, the Home Secretary Amber Rudd told Andrew Marr on Sunday (11 September) that a work permit system applied to EU workers looking to work in the UK is one option that the government is considering.

Meanwhile, Emmanuel Macron, until recently, France’s economic minister, and now one of the favourites to be the next French President as the representative of the progressive left, has called for a ban on financial passporting rights for British firms when the UK leaves the EU. These rights allow financial service companies, such as banks or life assurers, based in one EU country to sell their services across the EU. Mr Macron said: “The financial passport is part of full access to the EU market and a precondition for that is contribution to the EU budget. That has been the case in Norway and Switzerland.”

So there you have it, if Mr Macron gets his way, the UK’s incredibly important financial firms may lose the ability to sell its products across Europe, which many in turn affect the decision of foreign banks to maintain head offices in the UK.