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Brexit White Paper: the Roadmap for Brexit

Yesterday, the Government published its white paper (The United Kingdom’s exit from and new partnership with the European Union) setting out the 12 principles which… Read more

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Yesterday, the Government published its white paper (The United Kingdom’s exit from and new partnership with the European Union) setting out the 12 principles which will guide the withdrawal from the EU. Purporting to confirm Theresa May’s “vision of a truly independent, truly global UK and an ambitious future relationship with the EU”, the document is – unsurprisingly – aspirational in its view of how the Government will be seeking to structure and negotiate the UK’s departure from the Union. As such, there is little of substance, at this stage, for technology lawyers like us to really sink their teeth into. If you want to get ahead of Brexit with our AI-driven contract analysis tool, click here.

The Government’s white paper does contain a number of matters of note for UK businesses:

Section 1 (Providing certainty and clarity) re-confirms that the Government intends to introduce a Great Repeal Bill, which will be included in the next Queen’s Speech and introduced to Parliament in May or June 2017. This bill will remove the European Communities Act 1972 from the statute book and convert existing EU law into domestic law. This is intended to provide UK businesses with legal certainty going forward – essentially the same rules and laws will apply the day after Brexit, as they did before, wherever practical and appropriate. Whilst this clarity will be welcomed, it should be noted that the Government states that rules will not change “significantly” overnight: it will therefore be important to monitor developments over the next 2 years, in particular the publishing of the white paper on the Great Repeal Bill, to identify any changes of note.
Section 4 focuses on protecting the Common Travel Area, and confirms that the Government aims to maintain a “seamless and frictionless a border as possible between Northern Ireland and Ireland”. No further substantive detail is provided, other than to confirm that the Government will work hard to ensure that it finds “shared solutions” to “economic challenges” and to “maximise the economic opportunities for both the UK and Ireland”.
Section 5 considers likely approaches to immigration once the Free Movement Directive no longer applies to the UK. The Government recognises that this is a complex area, and has undertaken to ensure that businesses will have the opportunity to provide their views before any final decision is made. The white paper acknowledges that a phased implementation of any new arrangements may be appropriate to allow businesses and individuals time to adjust. Section 6 focuses on the related theme of how best to secure the status of the 2.8 million EU citizens currently living in the UK, and the 1 million UK nationals who are long-term residents. The Government regards this as an early priority as part of the overall negotiations, highlighting as an example the importance of access to healthcare for EU citizens in the UK and vice versa.
Section 7 (Protecting workers’ rights) sets out the Government’s commitment to an ongoing protection of worker rights. The white paper highlights a number of areas in which domestic UK legislation already goes beyond the legal minimum required by EU law, including annual leave, maternity leave and pay, and parental leave. The Government does not envisage any immediate changes as a result of the UK leaving the EU, but refers to an independent review of employment practices in the modern economy and a green paper on corporate governance, both of which are currently underway.
Section 8 (Ensuring free trade with European markets) highlights the importance of the UK’s financial services and other business services sectors in terms of their export value. The charts contained within the section give a clear indication of such services being central to any trade arrangement with the EU; in 2015, UK exports of financial services to the EU accounted for over £22 billion while exports of other business services were even greater. No wonder the white paper states that the Government will be aiming for “the freest possible trade” in services (whether business or financial) between the UK and EU member states.
Withdrawal from the single market would almost certainly result in UK firms losing the right to offer financial services across the EU by “passporting” into EU states. The white paper acknowledges that UK firms benefit from the passport regime and pledges that the Government “will seek to establish strong cooperative oversight arrangements with the EU”. Presumably this means that the UK will seek to take advantage of the existing third country equivalence regimes in EU legislation; however these relate only to some (wholesale) financial services. Therefore any arrangement in relation to the majority of financial services will need to be agreed as part of the negotiations between the UK and the EU. Further details may be provided in the forthcoming white paper on the Great Repeal Bill.
The Government recognises that a high quality, stable and predictable regulatory environment is important, especially around data transfers in the FS, tech and energy sectors which the government intends to maintain. Digital Economy Minister Matt Hancock MP reiterated the Government’s commitment to the implementing the General Data Protection Regulation earlier in the week, as it is considered to be a robust piece of legislation facilitating unhindered data flows.
Focus is also placed on ensuring that the UK will “remain at the forefront of collective endeavours to better understand, and make better, the world in which we live” (a somewhat grandiose way of emphasising support for UK innovation and technology). Little further information is given on how the Government proposes to achieve this (other than a wish to continue to collaborate with European partners on science and technology initiatives), but the ambition to “do more to commercialise the world-leading ideas and discoveries made in Britain” will certainly be something to watch – especially given the difficulties growing UK tech business can face in raising UK capital.
It has been cited by Brexit supporters that one of the key benefits of leaving the EU will be the UK regaining its ability to strike free trade agreements with other countries (a practice currently prohibited by virtue of its membership of the EU). The white paper is, unsurprisingly, keen to emphasise that, whilst the EU remains an “important” trading partner of the UK, other global markets such as Asia and the Americas are of increased importance to the UK’s economic prosperity. Whilst commentators will no doubt disagree as to the level of likely opportunity afforded by these new markets, the key point is that the UK will not be able to agree new trade deals until it has left the EU, even if the white paper correctly points out that a level of preparatory work can be undertaken at this stage.

In respect of the UK’s membership of the WTO, the white paper reconfirms that the UK will be establishing its own WTO schedules in goods and services at the WTO, so that UK businesses have clarity around the terms of their access to overseas markets around the world, post Brexit. The aim is to broadly replicate the UK’s current position as an EU member state.