Obliterating EU law about to unlock eye-watering £95bn prize in Brexit Britain victory

After Brexit the UK onboarded a large number of EU rules governing the financial sector with the Government’s Benefits of Brexit document this week outlining plans to amend or remove these to boost competitiveness. Among the reforms mentioned is a review of legislation known as Solvency 2 which currently governs the amount of money insurance companies can invest. The Association of British Insurers (ABI) have previously said it welcomes reform as soon as possible and believes changing the rules will increase UK competitiveness and make for more effective use of capital. According to a report commissioned by the group reforming Solvency 2 could unlock as much as £95billion which it is argued could boost the UK economy and be invested in areas such as renewable energy, infrastructure and companies involved in the net zero transition.

It’s further claimed around £16.6billion extra would be generated in additional GDP without any cost to the Government.

Meanwhile implementing Solvency 2 is thought to have cost around £3bn.

In its new document the Government said: “Our new rules will be more flexible and will better calibrate Risk Margin and Matching Adjustment to suit the UK’s insurance market and support insurance firms to provide long-term capital to
support growth.”

Speaking to Express.co.uk Victoria Hewson, Head of Regulatory Affairs and Research Associate at think tank the Institute of Economic Affairs, warned that there were worries levels of ambition and pace may be too low.

While she said the consultation was “leading in the right direction” she added it would be a “shame” if the outcomes fell below industry hopes.

The race is currently on as the EU has been conducting its own review into Solvency 2, presenting a danger of Britain being left behind.

Ms Hewson commented: “It looks as if actually even the EU is outpacing us on that so I’m not sure what that’s going to do for our competitiveness if even the European Commission can do more effective financial regulation reform.”

Before stepping down as Director of the ABI in December Huw Evans warned “the PM and Chancellor have to go further than the EU if the UK is not to be at a competitive disadvantage.”

The FCA has also been modifying the rules governing how firms list on the stock market in a bid to make London more attractive for new companies to launch.

The changes follow two major reviews of the rules by Lord Hill and Ron Kalifa carried out since Brexit.

source: express.co.uk