We look at the current Brexit paralysis and its affect on Uk and EU financial organisations
Whilst the recent dispensing of several of its obligations under the Withdrawal Agreement by the UK Government has caused Uk business tremendous damage to its reputation and ability to get new business – a couple of key announcements published in the “L’Agefi” online newsletter in France, have crept under the radar unnoticed.
They should not have done so, as they are likely to have the more profound affect to the ordinary person and to pretty much every size of UK business.
It may come as no surprise that the giant AVIVA Insurance company in the UK has sold off its filiale in Paris AVIVA France. These things come and go. What is interesting is the timing, In the same French publication just a few days before, there was a larger discussion about the exit of UK financial firms generally from the EU.
It seems that UK companies, for so long holding out for a continuation of things as they are – which benefits the UK – have decided enough is enough. They are coming home.
On a purely domestic level, this coincides with announcements elsewhere that UK expats, will not be able to continue their UK bank accounts, if they live in EU. It is however – Ok in reverse. If you happen to live in the UK, but have your bank account in Paris – well, that will seem to work fine. I know that because LCL have just sent me a new Bank Card, complete with a personalised photo on the front of the card, of some flowers in my garden. How nice.
My friend Victoria who lives in a flat in Paris, is very worried. The lack of financial passporting mentioned above, whilst inconvenient, is nowhere near as high an issue as the need to transfer qualifications – which threatens job viability – and quite apart from the shut down of ferry companies, who will no longer operate. And who can blame them? With some 7000 trucks planned to be parked up in fields in Kent, pending customs clearance – we are at the point of having customs-points next to Bromley South train station. More serious, is the lack of any physical card, that confirms residency and country rights. It is another Windrush in the making. In twenty years time, UK expats will not be able to physically prove, that they have UK rights, because the online IT Systems currently used, will be long gone. All of the above facilities that were free before, will now cost you and I money to get back to where we were, and with greater hassle.
As concerning as that is, UK businesses are in an even worse situation. We are now regularly seeing EU companies not wanting to enter into contractual terms with UK companies, because of concerns of contractual behaviour. And in order to efficiently handle financial simple tasks abroad, such as a simple clearance payment for good received or supplied – UK companies are being advised to set up their own EU office. Add to that the lack of mobility of long haul travel for the next six months or so, it is becoming increasingly difficult to see where UK companies are going to expand their business.
According to the newspapers in the UK, we are due for an increased unemployment phase, and there is a need for additional social security support. This is not the time for employees to lose jobs.
One would like to think that some sort of common sense will prevail, but our suspicion in the UK at least is that there are too many large corporate interests that are in direct opposition to the views and needs of the general public, who are both their employees and customers.
Perhaps we are too close to the action, here in the UK. Maybe it takes a French newspaper, to tell us what we should have seen from the beginning.