UK mulls making EU payments for passporting rights

Payments could secure passporting for City.

By John Bakie

The UK government is considering plans to make substantial EU budget contributions in order to secure continued access to “passporting rights” for UK-based financial services companies.

Plans being discussed by the cabinet would see Britain continuing to pay billions into the EU budget, despite pledges during the referendum campaign that the country would be able to spend its £350 million a week contribution to the EU in other areas.

While rhetoric from the Prime Minister Theresa May has led many to conclude the government is seeking a “hard Brexit” reports today suggest the importance of passporting to the City of London is too great.

Many major financial services companies are urging the government to secure continued access to the EU single market, warning that jobs could move from the UK to continental Europe if banks and insurers are cut off from the EU.

However, the government is likely to face challenges from its back benches over any proposals to pay more money to the EU, with the UK already facing a substantial £20 billion “divorce” bill for leaving.