InView Spring/Summer 2016

Issue 3 | Spring/Summer 2016
5
to having to compete with global rivals, without any of the
advantages we presently enjoy.
Another disturbing eventuality for insurers – and indeed
anyone who supports the concept of a United Kingdom – is
that a Brexit may well trigger another Scottish referendum,
on significantly different terms.
This is because Scotland is highly likely to vote to stay in
the EU. If the rest of the UK voted to leave, the Scottish
Nationalists could cite this as a major constitutional change
against the wishes of the Scottish people. In the 2014
referendum, the Better Together campaign was able to point
out that an independent Scotland might struggle to become
an EU member because of opposition to secessionism from
countries including Spain and Belgium. With the UK no longer
an EU member, this barrier would clearly no longer apply.
The upshot of Scottish independence for the UK Insurance
industry would be a reduction in market size from the UK’s
population of 65 million to 60 million or less. Moreover, with
Scotland gone, who could say what Wales might do?
Huw Evans, Director General of the Association of British
Insurers (ABI) shares these concerns and recently said
Scotland leaving the UK represented “a real political
uncertainty for our sector” (full text can be found at
www.abi.org.uk).
North of the border, this issue was addressed by Sir Gerry
Grimstone, Chairman of Scottish insurer Standard Life, who
has at different times described it as potentially “damaging”
and “disastrous.”
The outcome of the Brexit referendum, to be held on
June 23, will be a defining moment for the whole of the UK.
The Insurance industry in particular will be hoping we can
do business as usual in the years that follow.
Sir Oliver Heald MP QC
KEY ISSUES IN THE REFERENDUM DEBATE
In the weeks prior to the referendum, the debate will
consider the following issues (in no particular order):
Cross-border trade: whilst around half of the UK’s current
trade in goods and services is concluded within the EU, if
free to conclude our own free trade deals with the EU and
other states outside the EU, will we succeed in doing so?
Gross domestic product (GDP): there are widely varying
estimates as to the possible effect of Brexit on GDP.
It is acknowledged that the full effect will not be felt for
some years.
The effect on jobs: one school of thought is that there is
little evidence to support the view that trade would fall
substantially between British business and EU consumers
and that employers would benefit from the freedoms that
could arise were we to see the removal of what some view
as inflexible working arrangements imposed as a result of
European requirements. Others foresee a scaling back of the
UK operations of foreign companies with a move into lower
cost EU countries and risks to the financial services sector
which reputedly employs 2.1 million people in the UK.
Immigration: this threatens, for the man in the street voting
in the referendum, to be the dominant issue – a view
supported by recent YouGov polls.
UK sovereignty: as for immigration, this appears to be
another emotive issue. The importance of the right to take
back control and formulate our own laws will be trumpeted
by “leave” campaigners. Against this, “stay” campaigners
will point to the uncertainty as to which laws will apply
whilst we re-draw our own legislation.
With all of the above and other pertinent issues, the
background to the arguments of both sides of the
“In/Out” debate are complex and detailed.
Mike Yardley
Professional Support Lawyer
0161 214 0544
mike.yardley@weightmans.com