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Brexit bill clears second reading

At around 12.30am today, Parliament, following a second reading of the European Union (Withdrawal) Bill, backed it by a majority vote of 36.

At around 12.30am today, Parliament, following a second reading of the European Union (Withdrawal) Bill (“the Bill”), backed it by a majority vote of 36.

The Bill aims, amongst other things, to repeal the European Communities Act 1972. However, it appears certain that the Bill will not emerge with quite the same content following its eight days Committee Stage of the whole House of Commons, anticipated to take place in the autumn following the political parties’ conferences.

No less than 139 amendments (at the time of this blog) have been tabled, fundamentally focusing on Henry VIII powers; the return of EU powers to the devolved administrations rather than Westminster and EU-derived rights for UK citizens being subject to primary, as opposed to secondary, legislation.

Significantly, for the insurance and financial services sectors, are the proposed amendments within the Bill for transitional arrangements. A new clause has been drafted and tabled requiring the UK Government to seek transitional arrangements with the EU. Such arrangements are expected to facilitate existing trade agreements, currently applicable to the UK, to be negotiated and continued for the circumstances applying after the UK have exited the EU. The clause goes further, requiring the UK Government to also seek an associate membership of the EU Single Market for not less than two years following Brexit. Such an arrangement would maintain the status quo of insurance/financial passporting rights whilst new regulation for a post Brexit UK could be determined. However, this is, at this stage, a proposed amendment to the Bill and with a whole House Committee stage imminent, nothing is certain, adding an extra layer of concern for the insurance/financial industry and hindering any preparations they may wish to make for post Brexit business.