Why the Internal Markets white paper is key for business
7 August: Businesses in the UK are beginning to turn their attention to Brexit preparations. But have they also considered what will change to the internal market at the end of the transition period? Rachel Underhill, Senior Business Strategy Manager at ICAEW, takes a look at the UK Internal Markets White Paper consultation and why it is important for businesses.
The past six months have seen COVID-19 take up every waking minute for many, with business survival the core focus. While this is still front of mind, we are seeing more businesses shift focus towards a longer-term future and the end of the transition period at the end of the year. ICAEW’s Brexit Checklist details some of the considerations – customs, data and HR issues to name but a few – but the potential for opportunities and difficulties is not just related to trade with the EU.
The UK Internal Market White Paper and consultation relates to the provision of goods and services across internal borders ie between Scotland and England, Wales and Northern Ireland or any other combination.
Once the UK reaches the end of the transition period, certain powers will transfer directly from the EU to the devolved administrations. And while devolution brings with it opportunities (knowing what will work best for your locality, amongst others), there are concerns that a divergence across internal markets will make doing business more complex.
To mitigate this and ensure there is continuity across affected areas, the white paper sets out two principles for the UK’s approach:
- The principle of mutual recognition – regulations from one part of the UK will be recognised across the country to ensure the devolved administrations can set their own rules and standards, but still welcome the trade of businesses based anywhere in the UK.
- The principle of non-discrimination – so there is a level playing field for companies trading in the UK, regardless of where in the UK the business is based.
Not only does the UK need to ensure frictionless trade internally, it may also play a part in trade deals. Big business will want the comfort of not needing to operate under multiple regulatory conditions, and the prospect of such a possibility may make the UK less attractive to do business in.
The question is: what is the best mechanism for making sure this happens?
If you have views on the issues raised in the white paper or associated consultation, we would urge you to share these directly with BEIS through their online survey by 13 August 2020.