Sterling hit a two-month high today (29 November) on news that a Brexit settlement may have been reached but David Davis, the secretary of state for exiting the European Union, has come under fire from his political opponent.
Hilary Benn, MP for Leeds Central and chairman of the parliamentary select committee on exiting the EU, has written to Mr Davis saying the minister may be in contempt of parliament for releasing only a redacted version of the report into the consequences for different sectors of Brexit.
Mr Davis said the reasons for some parts of the report being redacted was to prevent “commercial, market or negotiation” sensitive material being released.
Mr Benn said in a letter to Mr Davis, which the former has released via his Twitter account, that holding back some of the information is contrary to the wishes of a parliamentary vote and may be an "abuse of process."
Mr Benn’s intervention comes in the wake of FTAdviser’s sister newspaper, the Financial Times, reporting that the UK and European Union negotiators have agreed the UK will pay a bill for exiting the European Union that may be in the region of £50bn.
Market reaction to the news has been stark, with sterling hitting a two month high on the news that progress may have been made in the talks.
Jordan Hiscott, chief trader at Ayondo Markets, said: “The fluctuations and gyrations of GBP/USD over the past two months have clearly been linked to the ongoing discussions in Britain’s attempt to leave the EU, alongside the associated financial commitments that are outstanding.
"Indeed, if rumours are to be believed, the possibility of a settlement, admittedly higher than I had expected, should then pave the way for continued negotiations and progress. Clearly the reaction is positive, with GBP/USD moving to a recent high of 1.3430 in brisk trade today (29 November).
“However, the contrarian in me points to a rather less positive outlook. The negotiations are yet to be officially agreed, and I suspect many hard Brexit advocates from the Conservative party will baulk at the idea of paying the €60bn (£52.99bn), with the possibility of further remunerations at a later stage, rumoured to be £80bn to £90bn."
But Steven Cameron, pensions director at Aegon, said despite the controversy over who has access to the 58 sector Brexit papers, it’s reassuring to know the government is looking at impacts at a more granular level.
He said: "Implications for the City of London are often wrongly assumed to apply equally across the wider financial services industry, but impacts on an investment bank operating across the EU will be very different from those on a pension provider which has never sought to attract customers from outside their domestic country.
"It’s only right that the government is looking at implications for insurance and pensions separately from other parts of the financial services industry.
“This is not just an issue for UK providers with customers elsewhere in the EU, but also for EU providers with customers in the UK, and it extends far beyond pensions.
"It’s in the interests of all parties in the Brexit negotiations to offer affected individuals continuity and certainty.
"Failure to agree could mean hundreds of thousands of individuals have to incur costs finding alternative insurance and pension products, something which would need factored into the wider Brexit ‘divorce bill'."
david.thorpe@ft.com
