ICAS reaction to the 12-point Brexit plan

Brexit Insights
By David Wood, Executive Director, Policy Leadership and James Barbour, Director, Policy Leadership

20 January 2017

The Prime Minister has now set out the UK Government’s intentions in relation to its plans to exit the EU. At first glance it is difficult to disagree with any of her 12-points. 

But what lies beneath these high-level objectives and what issues are likely to prove most problematic in the forthcoming discussions?

Point 1. Certainty

This is crucial. Business and the markets do not like uncertainty, although they have coped reasonably well with it in the past year.

We now have greater certainty as to the Government’s Brexit strategy; this increased transparency is positive.

Sterling reacted well to what was seen as a clearer roadmap, and the government’s intention “to provide business, the public sector, and everybody with as much certainty as possible as we move through the process” is to be welcomed.

Point 2. Control of our own laws

Although it may appear contrary to the overall ultimate objective of Brexit, adopting the body of existing EU law into UK law makes perfect sense to ensure a smooth legal transition on exit. It should also help facilitate any future trade deals with the EU.

The decision that the House of Parliament will vote on the final deal agreed with the EU before it is sanctioned, provides certainty in respecting the democratic process. It does, however, open up the possibility that the deal could be rejected. Where would this leave the UK, or indeed the EU?

Read more about what the 12-point Brexit plan means for the UK's constitution and sovereignty.

Point 3. Strengthen the union

The need to ensure that the devolved administrations can contribute to the process of planning for the UK’s departure from the EU is noted, but given the distance between the proposals outlined by Scottish Government and those by the UK Government, there are undoubtedly many obstacles to consensus on a number of major issues.

Whilst gaining greater control over UK affairs will be welcomed by many, it does pose a number of questions: will repatriation of certain legal powers to the UK lead to greater powers for the devolved administrations?

Read more about what the 12-point Brexit plan means for the UK's constitution and sovereignty.

Point 4. Maintain the Common Travel Area with Ireland

A major challenge will be to deliver a practical solution that allows the maintenance of the Common Travel Area with the Republic, while protecting the integrity of the UK’s immigration system.

Some comfort is offered by the EU’s approach to the reunification of Germany which proved that political will can, on occasion, overcome any legal impediments.

Point 5. Control of immigration

Businesses will be encouraged by the recognition that we do need migrants, especially those with specific skills.  We do not know, however, what type of system will be introduced to ensure that there is control over immigration; this was not clear from the Prime Minister’s speech.

Point 6. Rights for EU nationals in Britain, and British nationals in the EU

We particularly welcome that the UK Government intends to seek certainty, as soon as practicable, on the rights for EU nationals in Britain, and British nationals in the EU.

A number of ICAS members are impacted by the continuing uncertainty over such matters.

The Prime Minister highlighted that the UK would be willing to agree to a deal on this issue immediately. 

Point 7. Protect workers' rights

For many people, one of the main benefits of the UK being a member of the EU was the increased employee rights and protections which Brussels introduced. Therefore, it is welcomed that the Prime Minister intends not just to translate those existing rights under EU law into UK law, but also to build on them.

Read more about what the 12-point Brexit plan means for business.

Point 8. Free trade with European markets and Point 9. New trade agreements with other countries

After leaving the EU, the UK will be able to negotiate its own trade agreements both with the EU but also all other countries around the globe. Ideally, as the Prime Minister states, the freest possible deals in goods and services will be negotiated.  However, it remains to be seen what will be the terms of any such agreements.

The Prime Minister also indicated that the UK might continue to make certain payments to the EU on a much smaller scale in relation to specific European programmes. She highlights this as a matter for the UK to decide, though clearly the EU would need to agree to any such participation.

Read more about what the 12-point Brexit plan means for business.

Point 10. The best place for science and innovation

This is a crucial objective. Collaboration with our European partners and indeed other partners, on major science, research, and technology initiatives is essential to build the Government’s vision of the UK.

This, however, could prove to be challenging as the EU Member States look to their own futures in the EU, post Brexit; some may see this as an opportunity to weaken the UK’s strong position in science and innovation.

Read more about what the 12-point Brexit plan means for business.

Point 11. Co-operation in the fight against crime and terrorism

Given the high standing of UK security forces and the common threats of crime and terrorism faced by all EU Member States it is hoped that the UK will continue to co-operate with its European partners in such matters.

It is, however, likely to be more difficult than in the past and efforts to co-ordinate policy on foreign affairs are certainly more likely to be fraught with difficulties.

Point 12. A smooth, orderly Brexit

Businesses should be comforted by a proposed phased-in implementation, which might vary for different issues and sectors.

The Prime Minister made clear that this will not be an unlimited transitional status (reflecting “some kind of permanent political purgatory”), which she rightly pointed out would not be in the interest of the UK or the EU.

It is certainly in no one’s interests for there to be a cliff-edge for business or a threat to stability, as we change from our existing relationship to a new partnership with the EU.  

A better idea of our goals

Many will welcome the clarification of the UK Government’s objectives and direction of travel, and respect the call for positive and constructive negotiations and a spirit of partnership and co-operation, to achieve an outcome which works best for both the UK and the EU.

There is a lot of detail still to be worked out and lots of challenges and possible pitfalls, but at least we now have a better idea of what we, as a country, are seeking to achieve.

The way forward

There is a welcome sense that progress has been made and that we have a clearer sense of direction. If both parties pursue the negotiations in a spirit of goodwill and co-operation, we may yet see the Prime Minister’s vision of a Brexit which balances partnership and co-operation with the regaining of greater UK control and autonomy.

Whilst “the 27” (other Member States) might wish to demonstrate the detrimental impact of a country leaving the EU and could see opportunities for their own national gain, it is hoped that there can be a constructive approach to the talks and a positive outcome can be achieved for both sides – and that the Prime Minister’s veiled threats will not be needed.

ICAS will continue to monitor developments and provide input to represent the interests of business and the profession.  We will highlight relevant issues to be considered in the course of the negotiations and comment on the Great Repeal Bill within our areas of expertise.  Over the longer term, we will clearly seek to influence policy post Brexit, as the vast body of legislation which we have inherited from the EU is reviewed and amended.

Have your say 

ICAS is looking to its members for their opinions on Brexit. As leaders in business, finance and politics, the voices of CAs need to be heard now more than ever. Get in touch with ICAS to share your views, stories and opinions on Brexit and beyond.

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