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ICAEW examines Brexit White Paper

The UK Government released a White Paper outlining its approach to leaving the European Union on 2 February 2017. Here ICAEW provides a summary of the key points and positions within the paper.

The White Paper sheds little light beyond May’s Lancaster House speech, but confirms her approach to deliver a ‘clean’ Brexit for the UK.

It covers both the UK’s exit from and new partnership with the EU and sets out the UK’s strategic aims for leaving, based on the 12 principles which the Prime Minister set out in her speech last month.

  1. Providing certainty and clarity: Government will bring forward a White Paper on the Great Repeal Bill and the final deal agreed will be put to a vote in both Houses.
  2. Taking control of our own laws: The UK will seek to agree a new approach on dispute resolution mechanisms to interpret and dispute resolution with the EU.
  3. Strengthen the Union: Government will continue to work with the devolved administrations on an approach to returning powers from the EU that works for the whole of the UK.
  4. Protecting our strong and historic ties with Ireland and maintaining the Common Travel Area: Government will work with the Northern Ireland Executive, the Irish Government and the Crown Dependencies to deliver the maintenance of the CTA, while protecting the integrity of the UK’s immigration systems.
  5. Controlling migration: The Free Movement Directive will no longer apply and the migration of EU nationals will be subject to UK law. There will be a phased process of implementation to prepare for the new arrangements and businesses and communities will have the opportunity to contribute their views.
  6. Securing rights for EU nationals in the UK, and UK nationals in the EU: Government would like to have this issue resolved ahead of formal negotiations, but this has not proven possible.
  7. Protect workers' rights: Government notes that rights such as paid holiday and maternity leave do not depend on EU membership. This section also mentions the corporate governance green paper.
  8. Ensuring free trade with European markets: Financial services passporting is mentioned, followed by a promise to seek the freest possible trade in financial services between the UK and EU Member States.
  9. Securing new trade deals with other countries: The approach to trade policy will include: bilateral FTA dialogues with third countries, participation in multilateral and plurilateral negotiations, market access and dispute resolution through the WTO, trade remedies, import and export controls, unilateral liberalisation, trade preferences and trade for development.
  10. Ensuring the UK remains the best place for science and innovation: HM Treasury has set out a range of guarantees for underwriting EU funding which send a clear message that UK businesses and universities should continue to apply for EU funding.
  11. Cooperating in the fight against crime and terrorism: Government will seek a close and strong future relationship with the EU, with a focus on operational and practical cross-border cooperation.
  12. Delivering a smooth, orderly exit from the EU: It is in no one’s interests for there to be a cliff-edge for business; Government wants to reach an agreement on its future partnership with the EU by the end of the Article 50 process. This will allow for a phased process of the new relationship, and the time needed to phase in mutual arrangements may differ. There will be no form of unlimited transitional status.

Of interest, the section on protecting workers’ rights mentions the corporate governance green paper – which is indicative of the importance the Government places on these reforms in creating a new framework for business behaviour post-Brexit.

There are no significant mentions of accountancy or professional services and Government makes clear they will seek common regulatory ground (most likely equivalence) for financial services.

It also signals a willingness to make reduced budgetary contribution and play a role in EU security as two of the UK’s bargaining chips for the single market access to support priority sectors.

The Government seems confident that its pre-existing trading relationship with the EU will give it a significant head start in negotiating a new FTA, and does not draw a link between the new trading relationship with future immigration policy.