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What does Brexit mean for the digital economy?

It has become increasingly clear that there is no plan beyond the Brexit, so what do we do now, asks Chi Onwurah, the shadow minister for business

Some months ago I decided early July would be a good time to meet commissioners, industry bodies, MEPs and others leading on digital innovation and competition in Europe to get input into Labour’s digital economy policy and the digital single market brief in particular.

I knew it would be a few days after the referendum vote, but I had not envisaged it would be in a Brexit world. Walking through the EU citizens queue to board the Eurostar highlighted to me just one consequence of the vote. Speaking at the Socialist and Democrat MEPs conference, I received a spontaneous round of applause when I said how much I would miss my own EU citizenship.

The Brussels I visited was still largely in shock, but beginning to get to grip with some of the implications of Brexit.

I met with Digital Europe (which represents the digital technology sector across Europe), DG Connect (which leads on the development of the digital single market) and the Cabinet (office) of the European competition commissioner Margrethe Vestager, and the research, science and innovation commissioner Carlos Moedas.

Government in turmoil

I was told repeatedly that Brexit negotiations could not start until Article 50 had been triggered. But it was equally clear that everything had already changed. British MEPs reported that their positions on committees, and their influence in debates, were already being undermined.

British EU employees expressed concern at their status. Britain has a window of opportunity to influence Brexit from within, and it is to be hoped that Britain’s new Brexit and trade ministers will take advantage of that.

But it has become increasingly clear that there is no plan beyond Brexit.

We now have a new prime minister, a new Cabinet and even  new departments. While the civil service could have carried on preparatory work during a Conservative leadership election, this reconfiguration of government is likely to be much more disruptive as civil servants and ministers fight the resulting turf wars.

And we can be sure that lobbyists and vested interests will be doing their best to fill this vacuum of purpose.

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At the same time the new minister for the Department of Culture, Media and Sport must quickly decide if the Digital Economy Bill, currently making its way through the Commons, needs amending to reflect a Brexit world.

Brexit calls into question the bill’s headline policy – a universal service obligation to guarantee “high-speed” broadband for all.

If there was ever a plan as to how this would be funded, ministers have not shared it with us. It is possible they were hoping that some of the funding would come from Europe, but with this now ruled out, government will be more dependent on private-sector investment commitments.

Other funding brought into question is the Juncker infrastructure investment plan. How will the timing of this billion-euro programme coincide with two years of Brexit negotiations? Will Britain’s smart meter rollout still benefit from EU funding? Will Britain benefit from the European Fund for Strategic Investments?

Uncertainty ahead

Responsibilities under competition law will not change until we actually leave, and even then, there is no fundamental difference between UK and European law. This is partially because the UK was so influential in drafting European competition directives.

Even so, we will have to legislate to replace a number of important directives to ensure there is no race to the bottom and no rights or competitiveness are lost. What will replace the Article 7 regulation for the telecoms sector?

There is also the question of the plans the department has for EU directives which have been passed but have yet to be implemented. The general data protection regulation is due to come into force by 2018, and Baroness Neville-Rolfe has already come clean, admitting she doesn’t know what will now happen to data protection or ownership for the UK.

What will happen to the directive on web accessibility or the recently adopted network and information security directive to ensure cyber security? These are issues which will impact our digital economy and digital rights at a time when we should be seeking to strengthen them and make them more coherent.

Keep hold of the digital economy

The recent canning of and the commitments in the Digital Economy Bill to increased data sharing do not bode well for a consistent framework on data ownership.

Access to skills is also a significant issue for the digital economy, and one linked to freedom of movement. At present, London is ranked as the best place in Europe to found a startup. But with the uncertainty of Brexit, many startups are looking to move elsewhere.

It was clear that just as many in the UK will miss their EU membership, many in Europe will equally miss the UK as a member. More than one person called us “the voice of reason”. It is feared that a diminished UK voice in Europe will mean reduced realism and practicality in Europe’s digital policy, while industry will lobby for deregulation as the natural consequence to Brexit.

Overall, the mood was not positive, with many questions and very few answers. The UK digital economy is the strongest in Europe. We need to make sure that digital Brexit is driven by informed digital voices. Let us hope the Brexit minister David Davis is listening.

Chi Onwurah MP is shadow digital economy minister

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