As the UK prepares to leave the European Union next year and head into a transition phase, a new report outlines where British businesses want to stay close to EU rules and where they want divergence.
‘The task of unpicking 40 years of economic and regulatory integration is complex and colossal’, CBI Director-General Carolyn Fairbairn warns at the launch of a new CBI report on EU rules that matter for the UK economy.
Smooth Operations is based on thousands of conversations with UK businesses, as well as dozens of leading trade associations, and provides an A to Z of the rules that will matter after the transition period. From architects to zoos, it outlines the regulatory needs of 23 industry and service sectors, of which 18 prefer convergence or alignment for the majority of regulation that matters.
The CBI study, compiled over a six-month period, says Brexit presents opportunities for rule changes in sectors such as agriculture, shipping and tourism that could ultimately benefit the British economy and consumers.
However, the report adds that opportunities for divergence are vastly outweighed by the costs of deviating from rules necessary to ensure smooth access to the EU market.
Another important finding is that changes to rules in one sector have significant knock on effects for companies in other sectors and throughout supply chains. The main regulatory needs in the technology and creative sectors are:
• The UK will have to negotiate hard to convince the EU to ensure the UK’s licensed TV channels can continue broadcasting to EU consumers
• The UK will most likely need to continue to apply EU rules on broadcasting.
• Strong protections for intellectual property are critical to supporting the UK’s world-leading creative talent. The creative industries want to maintain as many of these protections as possible on leaving the EU.
• Convergence on data standards that pave the way for an ‘adequacy agreement’ is a priority
• It will also be critical for the UK to continue to shape forthcoming regulations on the Digital Single Market to best reflect the need of UK businesses and consumers.
• Businesses require continued convergence on rules on roaming to avoid costs rising for consumers.
• EU regulation of the telecoms sector has been largely positive, and stability is the priority in order to continue achieving the good objectives of EU rules and preserve investment certainty.
Tom Thackray, CBI Innovation Director, said: “This report comes from the heart of British business. It provides unparalleled evidence to inform good decisions that will protect jobs, investment and living standards across the UK.
“The experience-based evidence of companies across the country will be essential in the months ahead, as it is critical that negotiators understand the complexity of rules and the effects even small changes can have.
“The UK is a world leading digital economy, and the tech and creative sectors are an exciting mix of home-grown entrepreneurial talent and international businesses. The tech economy is creating jobs twice as fast as the rest of the economy and spurring jobs and investment across the UK, so a close relationship between UK and EU rules in the technology and creative sectors will be necessary after Brexit to support truly global industries. British and European consumers and businesses both stand to benefit from getting it right on technology rules.”
Stephen Hurley, Senior Lawyer and Head of Brexit Planning at BT Group, said: “The current UK regulatory framework, which is grounded in EU law and ensures an important role for the EU Commission, has worked well for the most part and has been successful in delivering substantial investment and effective competition in the UK across a wide variety of markets.
“The current regime also enables UK operators and customers to benefit from the Single Market and we therefore think ongoing UK/EU alignment is important post-Brexit. In any event, a key element of the sector’s future success will be a stable and proportionate regulatory environment with appropriate checks and balances.
David Davis, Secretary of State for Exiting the European Union, gave a speech in February promising to “continue our track record of meeting high standards, after we leave the European Union”, adding: “We start from a position of total alignment, with unprecedented experience in working with one another’s regulators and institutions.
“The agreement we strike will not be about how to build convergence, but what we do when one of us chooses to make changes to our rules.”
Across the UK, the CBI speaks on behalf of 190,000 businesses of all sizes and sectors. The CBI’s corporate members together employ nearly 7 million people, about one third of private sector-employees. With offices in the UK as well as representation in Brussels, Washington, Beijing and Delhi, the CBI communicates the British business voice around the world.
A sector-by-sector summary of rules and regulations desired by businesses as part of the CBI’s extensive consultation can be found at the start of the report.