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Brexit White Paper: The Future Relationship between the UK & the EU - nuggetsAugust 2018

Brexit White Paper
The Future Relationship between the United Kingdom and the European Union

BSRIA has digested government's recent White Brexit Paper - highlighting the issues important to industry.

Scene setting

On Thursday 12th July 2018 government released its White Paper setting out its most meticulous negotiating stance to date.

Key points:

  • free trade area for goods;
  • separate arrangement for services;
  • end free movement of workers.

Proposals for a mobility framework would support business growth but falls short of recognising migration as a negotiation issue.

The White Paper sets out a “framework for mobility” that goes beyond provisions under the WTO. The UK wants to reach a reciprocal deal with the EU that allows staff to continue to easily travel between UK-European offices. Indeed: the paper sets out a vision for streamlined border arrangements that allow “smooth travel” for all citizens between the UK and EU.

But industry will be frustrated that the White Paper fails to make the broader link between migration arrangements and trade. This could be an important element of securing a deep relationship with the Single Market and, therefore, a comprehensive deal on trade.

Construction: future access to people is a “top priority” for industry

The White Paper establishes a vision for how the UK and EU can continue to benefit from frictionless, tariff-free trade for manufactured goods, recognising the complexity of long-established supply chains across the continent.

Achieving this vision will be especially crucial for the construction sector reliant on significant import volumes of the materials and products that reinforce almost every construction project in the UK.

The commitment to supporting business in moving people between states is welcome and new arrangements must avoid placing new administrative and costly burdens on businesses – especially SMEs. These are issues central to the government’s ability to deliver its ambitious housing and infrastructure plans as part of the modern Industrial Strategy, so it is essential that the forthcoming negotiations get them right.

Energy: government has rightly identified the right concerns for energy businesses, but needs to “dial up” choices for the sector into decisions

The White Paper confirms the UK’s commitment to facilitating the continuation of the trade in electricity and gas. Business has been clear that barrier-free access and appropriate regulatory convergence with the IEM will be important to ensure that the UK and the EU can continue to trade energy effectively.

While it is encouraging to see the UK’s willingness for continued participation in ENTSO-E and ENTSO-G, the Agency for the Co-operation of Energy Regulators (ACER) isn’t referenced. The UK’s ongoing influence and participation in these key EU agencies and bodies will be crucial to maintain regulatory alignment in the long-run and ensure the energy sector continue to flourish.

On nuclear, the UK will seek a close association with Euratom. Failure to preserve continuity in these arrangements on nuclear would result in significant damage to the UK civil nuclear industry, therefore, it is imperative that the benefits of this community are maintained.

Life sciences: government has highlighted the way forward and the EU needs to start engaging to make it a reality

The White Paper sketches out future UK participation in the European Medicines Agency (EMA), accepting its rules and contributing to its costs under new arrangements that recognise the UK will not be a Member State.

Science & innovation

As a leader in the advancement of science and innovation and a top five collaboration partner for every EU Member State, the UK plays a vital role in making Europe a base for pioneering research. The UK has suggested this should continue through regular dialogue and the possible association in research and innovation programmes such as Horizon Europe.

Higher education: there optimistic signs and signals, but still more to do on the concerns of businesses, researchers and students

The paper states that the UK intends to facilitate mobility for students to enable them to continue to benefit from world leading universities and the cultural experiences the UK and the EU have to offer, such as through the Erasmus+ programme.

EU students bring approximately £3.7billion annually to the UK, enhance the quality, diversity and reputation of UK universities and help lay the foundation for future overseas business, research, as well as social and cultural links.

An immediate priority for the higher education sector would be to clarify the future status of EU students and to ensure the UK has an effective system to allow international students to transition from a Tier 4 to Tier 2 visa.

Construction bodies are also concerned how visa arrangements will work and are asking government for clarification.

Indeed: the UK seeks reciprocal arrangements that allow UK nationals to visit the EU without a visa for short-term business reasons and equivalent arrangements for EU citizens coming to the UK. This would permit only paid work in limited and clearly defined circumstances, in line with the current business visa policy.
Concern that professional qualifications should be continue to be formally recognised and accepted in EU countries have been addressed. This is considered important so that UK construction companies can continue to trade in the EU.

Currently, 1 in 7 workers are recruited from outside of the UK with the largest component of these from Romania. The UK recruits more foreign workers than its European counterparts, which is a concern for companies and future recruitment.

Facilitated customs arrangement: important for manufacturers

Upon its withdrawal from the EU, the UK will leave the Customs Union. The UK has been clear that it is seeking a new customs arrangement that provides the most frictionless trade possible in goods between the UK and the EU, while allowing the UK to forge new trade relationships with partners around the world and will remove the need for customs checks and controls.

In practice, this means that products destined for each other’s territories will undergo one set of approvals and authorisations in either the UK or the EU customs areas and then be accepted in each other’s markets without further customs checks or levies.

The UK will still be allowed to seek its own new trade agreements and would become a combined customs territory for trade of goods.

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