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Thursday 16 March 2017 12:01 am

Now the legal eagles are urging the government to seek a bespoke Brexit agreement for the City, while warning a “no deal” situation would have serious consequences

By: Hayley Kirton

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Legal eagles have today become the latest in a string of experts calling on the government to secure a bespoke deal for the financial sector in the Brexit negotiations.

The report from the Bar Council warns London's status as a financial capital risks being "greatly diminished" if the country cannot find a suitable alternative for passporting post-Brexit, and options currently being used by other countries, such as equivalence regime, the third country passport and WTO rules, will not provide a sufficient level of access.

"What we need is a bespoke agreement with the EU, replicating the status quo as far as possible and covering the gaps created by the loss of the passport regime," said Hugh Mercer, chair of the Bar Council's Brexit Working Group. "Any such agreement must also grant legal and other essential services sufficient rights so that they can continue effectively to support the financial services sector."

Read more: UBS chair: We're eyeing the exit ahead of Brexit

Passporting as it currently stands allows firms in the UK to do business in other EEA countries. 

Other groups have previously advised a bespoke Brexit deal would be better than grabbing something off-the-shelf. 

TheCityUK's Budget submission, which was made public last month, called for a tailor-made agreement with the EU "based on mutual recognition and regulatory cooperation that delivers similar market access rights to those currently in place". 

Read more: Tusk accuses British government of making threats over "no deal" Brexit

Meanwhile, a report published in January by law firm Norton Rose Fulbright on behalf of the Financial Services Negotiation Forum warned the current European model of equivalence was not a "silver bullet" solution to losing passporting. 

The Bar Council also called on the government to have a back-up plan in the bag, warning a "no deal" scenario would have "serious consequences". 

"Our trading relationship with the EU would be under WTO terms, which would mean an increase in tariffs on goods and services and uncertainty for millions of UK citizens living abroad about their rights to residency, work, healthcare and state pensions," Mercer added.

"The possibility of a 'no-deal' scenario is sufficiently real that we must have a 'plan B'."

Read more: David Davis: We don't know how much a "no deal" Brexit will cost

In her landmark Brexit speech, delivered back in January, Prime Minister Theresa May warned other EU member states looking to drive a hard bargain she was more than happy to walk away with no deal than settle for an inadequate one.

"No deal for Britain is better than a bad deal for Britain," she said. 

Read more: Don’t panic – but remember Brexit will be a tough political process

The barristers' report also urged the government to protect free movement of EU labour and to safeguard rights currently enjoyed by UK workers by virtue of the country being a member of the bloc.

Today's report, which builds on previous work already published by the Bar Council, has been released just days before the Prime Minister is due to trigger Article 50. 

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