Chris Smith: Getting a clearer idea of what Brexit means for business

More than a year after Theresa May explained 'Brexit means Brexit', business managers might have been hoping for more detail of what that means for them in practice, given the UK is exiting the EU in 18 months.
Chris Smith is Head of Corporate, Gillespie Macandrew LLPChris Smith is Head of Corporate, Gillespie Macandrew LLP
Chris Smith is Head of Corporate, Gillespie Macandrew LLP

The political language – “soft Brexit”, “hard Brexit”, “cliff edge”, “deep and special partnership” – doesn’t offer much help to businesses that might need to alter internal processes, or reorganise the logistics of how they do business, in time for exit day. But some practical details are gradually becoming discernible.

After last month’s round of UK-EU Brexit negotiations, the citizens’ rights working group updated its table comparing positions on citizens’ rights. It uses a traffic light system to highlight areas of divergence in red, and areas of agreement in green. Yellow indicates “where further discussion is required to deepen understanding”. The table lists matters of relevance to UK businesses employing EU nationals, including rights of residence, entitlement to healthcare and other benefits and mutual recognition of professional qualifications. Of the 67 matters listed in the August update, 36 are green, up from 22 when the table was first published in July.

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It’s useful for UK businesses, trying to persuade EU workers to stay, to know the UK and EU are largely agreed on the rights of existing workers’ family to remain and for their children to continue in education.

Notably, however, the citizens’ rights document is the only comparison table currently appearing on the website of the Department for Exiting the European Union (DExEU). No such document exists for either of the other two key questions under discussion: the border between Ireland and Northern Ireland, and settlement of the UK’s financial commitments to the EU. Both have implications for business, particularly those which trade across the Irish border or depend on receipt of EU funds.

Meantime, the UK Government is not letting the EU’s insistence on agreeing exit issues before discussing a future relationship prevent it from making proposals about how the UK’s future relationship with the EU might work. In addition to three position papers on exit issues published in August, DExEU published several “future partnership papers” with proposals on a range of issues.

The future partnership paper on customs arrangements attracted the most press attention, with some scathing comments about its vision of frictionless borders made possible by customs processes and technology yet to be developed. Nevertheless, the paper should be of interest to businesses for its express call for an interim customs union with the EU, and emphasis on the inclusion of business views in its development of more detailed proposals later.

Also of interest to business is the future partnership paper on a judicial cooperation framework. It’s of huge practical importance to businesses operating across the EU to know contracts are going to be valid and enforceable after Brexit, and to know whether consumers’ existing EU rights will continue to apply.

Finally, the most practical of the future partnership papers for business is the one on data protection. This signals that the present government has no appetite for using Brexit as an opportunity to set a different course for UK law in this area. Throughout, the emphasis is on cooperation and aligning systems in a way that would minimise the practical impact for businesses.

Chris Smith is Head of Corporate, Gillespie Macandrew LLP