Pensioners living in the EU will have to rely on the “goodwill” of Brussels in the event of a no-deal Brexit, the UK’s chief negotiator has admitted.
Brexit Secretary Dominic Raab was appearing on BBC Radio 4’s current affairs flagship Today on Thursday morning to answer questions about the first 25 guidance papers of 80 giving advice on a no-deal scenario for businesses and individuals.
The Department for Exiting the European Union told International Adviser, the guidance, known as “technical notes” was published later on Thursday.
Raab is leading negotiations with his EU counterpart, Michel Barnier, to reach a trade deal with the 27-nation block to replace Britain’s existing membership when it ends in March 2019.
If the negotiations fail, a no-deal scenario would make the UK a third country, barring pension payments across borders and blocking access to bank accounts.
Chancellor Phillip Hammond has already acknowledged the risk to pensions in a written answer in parliament.
Risk to pensions
In response to these pension risks, Raab told the BBC: “We will work with the EU to make sure that the recognition is in place to provide that continuity. It is fair to say it will require some collaboration.
“We have some good collaboration, for example, with the Bank of England and some of the EU institutions, and… we will continue to have, I think, with goodwill for the no deal scenario, if in the unlikely event it comes round,… to make sure on both sides we manage these risks sensibly.”
At a press conference on Thursday morning, Raab said he was confident of resolving issues affecting pensioners in a no-deal scenario with deals between regions or member states, if an agreement with the EU failed to materialise.
“It is hardly in the interest of southern Spain to do harm to [UK] pensioners down there. Cooler heads will prevail,” he said.
Brexiteer Raab also stressed an agreement was “in sight” and communication had been upgraded to “continuous”.
In relation to passporting financial products around the EU, Raab said firms have already taken action by setting up “small subsidiaries” within the EU27.