Article 50 Triggered
Government maintains dialogue with finance employers as Article 50 is triggered
Nine months after the UK people voted to leave the European Union (EU), the Government has now triggered Article 50 of the Lisbon Treaty, the formal mechanism by which member states can end their EU membership. Article 50 refers to a two-year ‘notice period’ for leaving, so the UK is set to leave the Union on March 30 2019.
The Prime Minister has previously announced that the UK will not remain a member of the single market following Brexit, as her Government believes that it needs a measure of control over immigration from EU countries. Theresa May also said it was unlikely that the UK would remain a member of the customs union, so the main task for her Government now seems to be to negotiate the best trade deals it can with the EU and with other major economies.
The financial sector is most definitely concerned about the potential impact of Brexit. Particular issues of concern include:
- Whether passporting rights will be maintained, i.e. whether firms could operate in EU countries without obtaining separate approval from other national regulators
- Whether tariff-free trade with EU states will continue
- Whether skilled workers from the EU could still work for UK financial institutions
The Government continues to hold round-table discussions with banks, other large financial institutions and financial trade associations on these and other issues.
Commercial Secretary to the Treasury, Baroness Neville-Rolfe, said:
“We are determined that the UK will continue to be a global financial hub and are focused on negotiating the best deal for financial services … to ensure the sector continues to be one of Britain’s great success stories.”
The Brexit legislation was eventually passed by Parliament in early March, after the House of Lords had tried unsuccessfully to persuade the House of Commons to guarantee the continued residence and employment rights of EU citizens already living and working in the UK. What exactly happens regarding these EU citizens will be one of the many issues to be covered in the Brexit negotiations with the EU over the next two years.
Although it has been known for nine months that the UK is to leave the Union, there seems to have been little, if any, impact on the job market so far. Only two days after the bill authorising the triggering of Article 50 was passed by Parliament, it was revealed that the UK’s unemployment rate had fallen to 4.7%, its lowest level since August 1975.
The UK remains a member of the EU for the next two years, so for the present, all employment laws introduced by the Union remain in force. The freedom of movement within the Union enjoyed by EU workers also continues as before.