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Prime minister Theresa May’s draft EU Withdrawal Agreement brings the country one step closer to avoiding a No-Deal Brexit, according to industry.
The 585-page draft agreement, which was backed by Cabinet ministers yesterday, is far from perfect, according to industry experts, but deserves backing from members of Parliament (MPs).
TechUK CEO Julian David said the agreement that has been negotiated “is the only solution on the table that can deliver on the outcome of the 2016 referendum while also securing jobs and investment in UK tech”, and that MPs “should support the agreement”.
David added that the agreement is far from perfect, and will “increase friction in trade with the EU and impose significant and costly changes for businesses”, but that failing to confirm parliamentary agreement “risks creating even more uncertainty for tech businesses, their staff and their customers”.
“As a sector responsible for over a million jobs, and the fastest growing part of the UK economy, we recognise that a No-Deal Brexit would directly impact the ability of tech companies to trade, move data and secure talent,” he said.
“It would disrupt supply chains and undermine the UK’s capability for world-leading science and research, and it would hit investment and lead to job losses. We believe small and medium-sized businesses would be worst affected in the case of no deal.”
The Confederation of British Industry (CBI) is also positive to the deal receiving Cabinet backing. CBI director general Carolyn Fairbairn said that after 20 months of debate, the agreement is progress.
“If passed, it moves the UK one step away from the nightmare precipice of no deal and the harm it would cause to communities across the country,” she said.
“Securing a transition period has long been firms’ top priority. and every day that passes without one means lost investment and jobs, hitting the most vulnerable hardest. Time is now up. This deal is a compromise, including for business, but it offers that essential transitional period as a step back from the cliff edge.”
However, she added that it is far from perfect and a long journey still lies ahead.
“More clarity on the final relationship is needed – uncertainty remains high, but this is an important step forward. Transition and the backstop are not the intended permanent solutions for either side, but should pave the way for more work on the future deal,” she said.
“This must secure frictionless trade, ambitious access for our world-beating services, and a say over future rules.”
Free flow of data
A key part of the agreement, from the tech industry’s point of view, is the government’s intent to ensure the free flow of personal data between the UK and the EU.
This has been one of the biggest worries concerning a potential No-Deal Brexit, which would hinder data flow as the legal framework for transferring personal data from organisations in the EU to organisations in the UK would have to change in the event of no deal.
The draft agreement said that EU law on the protection and flow of personal data will “apply in the United Kingdom in respect of the processing of personal data of data subjects outside the United Kingdom”.
TechUK CEO Julian David said the industry “particularly welcomes the clear statement of intent to secure the free flow of personal data between the UK and the EU”.
“This issue is critical to the tech sector and to every other industry in a modern digitising economy,” he said.
The Direct Marketing Association (DMA) also welcomed the plans for free flow of personal data post-Brexit. However, the organisation believes clarification is needed on what the agreement means for any new legislation, such as the ePrivacy Regulation currently being discussed in Europe, and if the UK will have to adopt any new legislation to continue the free flow.
DMA group CEO Chris Combemale said the organisation is “pleased to see that the free flow of data between the UK and EU will not be affected by Brexit, insofar as the UK will maintain EU standards of data protection laws like the GDPR [General Data Protection Regulation]”.
“We have consistently advocated for a robust UK-EU deal on data protection that would ensure organisations could exchange data freely, much as they do now. It’s reassuring to see the UK government have listened to the concerns of our industry and is proposing a way forward that should enable the UK to remain a world leader in data, technology and marketing,” he said.
The DMA added that the agreement does not refer to any continued close cooperation between the Information Commissioner’s Office (ICO) and EU data authorities, and believes clarification is needed on whether the ICO will still be in the position to discuss any new laws.
Brexit minister resigns
On the eve of the news of the draft agreement, Brexit secretary Dominic Raab also announced his resignation.
Raab, who is the second Brexit secretary to resign this year, was prominent on the Leave side of the EU referendum held in the UK in June 2016 and is a spokesperson for a “global Britain”, a neo-liberal, internationalist version of Brexit.
He has served as secretary of state for exiting the EU since the resignation of the original Brexit minister, David Davis, over his disagreement with prime minister Theresa May’s “Chequers plan” for a Brexit featuring a customs arrangement for goods, but not services.
Earlier this month, Raab spoke at a Tech Nation event where he said that the tech industry would benefit greatly from Brexit.
“If you get it right [it will benefit],” he said. “There are all sorts of risks with Brexit. I’m not saying there are no issues or challenges to be mitigated. But if we maintain data flows and the integrity of those smart regulations at home, within [EU] equivalence regulatory approaches, while we forge strong relations with growth markets around the world – in Latin America and Asia – then there is great scope,” he said.
Read more about Brexit
- The government’s No Deal Brexit planning document on data protection warns free flow of personal data from EU isn’t guaranteed, and organisations must take action to ensure they will still be able receive data from Europe.
- MPs have raised concerns around Defra’s Brexit readiness as it hasn’t yet begun testing six critical IT systems needed to replace EU systems, but the department remains confident.
- The HM Treasury and HMRC are putting measures in place to support the customs sector should the UK leave the EU with no deal, including funding to increase automation and training.