24 Jul 2018
If the UK exits the EU without a deal in place, paying private pensions to retired British expats will be illegal, MPs have been told.
The Independent reports that The Association of British Insurers said that those who receive their pensions in bank accounts in their adopted countries would not be paid.
ABI’s Director General, Huw Evans, said: “That is a perfectly plausible risk in the future if no agreement is reached in some countries of the EU.”
This follows Theresa May’s Chequers plan for Brexit being attacked by Britain’s leading service industries. By keeping the UK tied to EU rules, goods would be protected – but services would not, despite making up a significant 80% of the UK economy.
During the evidence session, Mr Evans warned of a loss of cross-EU insurance cards leading to tourists paying more for health insurance – as well as that 38m contracts would be “left in legal limbo”, seeing as it would also be illegal to pay claims in EU countries.
“If a claim comes in two years down the line, in a country like Germany, their lawyers will be advising them you can’t pay the claim,” Mr Evans said.
He goes on to say that with regards to the threat to insurance-based pensions, he would like to “avoid panic”, acknowledging it would not be a consequence of no deal in all EU countries.
However, he warned that the UK would “end up as rule takers.”
“That is inherent in the approach the government has decided to take in its negotiating position,” Mr Evans told the MPs.
He also suggested some company bosses were hesitant to speak out due to being “condemned by cabinet ministers.”
In the white paper that followed the Chequers plan, the UK discontinued any attempt at convincing the EU to grant “mutual recognition” to services after Brexit, instead settling for a lesser “equivalence” model. However, if Brussels decides that the UK’s regulatory regime does not meet the EU’s standards, it will be able to deny market access rights.
The shift was described as a “backward step” by Adam Minns, the executive director of the Commercial Broadcasters Association.
Mr. Minns said that the UK possessed more international channels than any other EU country, with an important factor being the ability to broadcast to the continent – but the Netherlands, being a country with its own tech hubs, highly-efficient air links and a common usage of the English language, was perfectly placed to dominate in that regard.
“We are not certain if we are being thrown under the bus, or have we hit a temporary roadblock,” Mr Minns told the committee, adding that he did not know if ministers understood the threat to service industries.
The City of London Corporation said it was apprehensive about the outcome, for example, for solicitors unable to “fly in and out to provide advice” but acknowledged that the decision was “pragmatic”.