A Brexit “no-deal” impact paper for financial services has been listed among the first batch of official assessments due to be published on Thursday, at a time when banks and insurers have been warning about the risks of a disorderly exit from the EU.

The paper was unexpectedly slated as one of about 20 “no-deal” papers to be published, covering subjects as diverse as nuclear research, farm payments and state aid. The government wants to spell out what action it will have to take should the UK crash out of the EU.

Downing Street had been hoping that the first batch of documents would generate relatively little controversy, which is why the presence of the banking paper on the publication list has surprised Whitehall sources.

UK Finance, the trade body for the finance sector, warned that a no-deal scenario needed to be addressed urgently “to avoid the risk of a serious breakdown in cross-border financial services in March 2019”. It is particularly concerned about continuity in contracts and the flow of data across the UK-EU border given a hard Brexit.



Ministers could yet pull the financial services paper from the documents published on Thursday, and Downing Street has so far refused to confirm which of the 84 no-deal assessments will be released in the first batch. The remainder will be released in September.



A health paper may also be released in the first wave, coming after NHS Providers, an NHS organisation, warned that hospitals could run short of drugs or even out of them in the event of a no-deal Brexit.

Dominic Raab, the Brexit secretary, is due to give a speech setting out the context for the release of the papers on Thursday morning, having returned from Brussels where he was meeting Michel Barnier in the latest round of divorce negotiations.

Other papers expected to be released in the first batch include one entitled Future participation in Erasmus+, referring to the European Union’s education, training and sport schemes.

The papers are understood to be relatively short, anywhere between two and five pages, and all follow a set template. The idea is to set out what actions government would have to take in each sector in the event of a no-deal Brexit, and to help clarify for businesses and organisations how they might need to respond.

Growing worries about the possibility of a no-deal, a possibility talked up by ministers as a negotiating tactic, have hit the pound in recent months, with sterling touching 12-month lows during August.

Mark Carney, governor of the Bank of England, warned this month that the risks of a no-deal Brexit were “uncomfortably high”. He said that he had asked UK banks to ensure they had the liquidity and the capital in place if needed.

On Tuesday Liam Fox, the international trade secretary, suggested that a post-Brexit immigration policy should favour those who want to go to the UK because of a job offer, as he sought to talk up the country’s economic prospects after leaving the EU.

Fox said the 2016 referendum result demonstrated that the British public had rejected free movement, but said any plans had to take into account the UK’s employment needs.

“I think the public can differentiate between people who come here with a job and will be contributing to the economy and those who, under free movement, were able to come to the UK and use our public services without ever having contributed to them,” Fox told LBC radio.

“We need to look in the future at how we match our employment opportunities with our migration policy,” he added, suggesting he favoured a two-tier system.

Britain has yet to spell out what sort of migration policy it wants to introduce after Brexit. A much-delayed white paper on the topic is due to be published at some point in the autumn. Net migration is supposed to be limited to 100,000 people a year, although the target has never been achieved.

Many sectors of the UK economy, such agriculture and healthcare, are reliant on workers from elsewhere in the EU. About 5.6% of NHS staff are EU nationals, and there have been repeated warnings that healthcare provision would be disrupted if the UK could not easily recruit from overseas.

The Liberal Democrat MP Layla Moran, who acts as a spokesperson for the pro-remain campaign group Best for Britain, asked whether Fox was signalling government policy in which there would be free movement into the UK for people with job offers.

“Liam Fox needs to come clean and tell us: is this the government’s plan or just more shooting from the hip?” Moran said. She said she believed free movement had benefited Britain and should be protected.



