Regulatory Outlook | February 2019 | What would a ‘no deal’ Brexit mean for UK business regulation?

Written on 10 Feb 2019

With less than two months until the UK leaves the EU, a 'no deal' Brexit still remains the default outcome.

In this edition of the Regulatory Outlook, we look at the potential impact of a no deal Brexit across 15 areas of business regulation, in addition to our usual survey of current regulatory issues and dates for your diary.

From this Brexit analysis, some overarching themes emerge:

Time to get granular

Many businesses will by now have well-established Brexit planning groups in place to mitigate business-critical risks in the event of a no deal Brexit. But there is much in the detail of certain regulatory regimes, and the practical processes around them, that has the potential to cause disruption on the ground. Will bid teams know where to look for public tenders once they are no longer being advertised in the Official Journal of the EU, and be familiar with new e-notification systems and forms? For goods being sold in the EU, do you know which EU entity will take on ‘importer’ responsibilities for ensuring that the product complies with EU law, and have labels been re-designed to include their details? Have you identified where personal data is transferred across borders, for example where IT services are outsourced or where data is transferred intra-group?

As with all aspects of regulatory compliance, training, workflows and communication will be essential to ensuring that rules are followed on the ground, and that flows of goods and services are not interrupted.

Understand what it will mean for your workforce

One of the areas about which we are asked most frequently is the impact of Brexit on workforces. The UK government has said that in a no deal scenario, the EU Settlement Scheme will be open to EEA nationals already in the UK as at 29 March 2019. But relevant employees will need to apply for settled status, and different rules will apply to EEA nationals coming to the UK after 29 March 2019. The position for UK nationals in the EEA will differ by country.

Understanding what this means for your business depends on having an accurate and up-to-date picture: not only of how may EEA nationals are currently employed in the UK, or vice-versa, but also where in the business they work. Is there a danger of a skills shortage in certain areas, and if so, is there action that can be taken to mitigate that, for example through training or use of technology? Might this have an impact on your recruitment strategy?

Consider the wider impact on regulation

Brexit continues to take up time and resource – not only for businesses but also for legislators and regulators. We have seen a noticeable drop-off in non-Brexit-related legislation and regulation. In a no deal scenario, this could persist for some time, and as regulators such as the CMA and HSE take up new responsibilities previously held by EU institutions, this could impact on levels of enforcement and other activity.

Looking further forward, the UK would need to establish its own regulatory priorities and strategies in certain areas. Whilst the potential for divergence from the EU will depend on what is agreed at a political level, businesses will have a vital role in shaping the direction and detail of UK regulation. Consultations, trade bodies and more direct lobbying will all have a part to play, and businesses should start to consider what part they can play.

Stay informed

It is more important than ever for businesses to keep up to date with developments and guidance on no deal preparations. The UK government has put together a Partnership Pack to help businesses prepare for a no deal Brexit and continues to publish ‘no deal notices’ covering a range of sectors and issues The European Commission has published its own series of no deal ‘preparedness notices’. You can find Insights from Osborne Clarke on our Brexit page, or sign up to receive our regular Brexit Business Brief.

How can we help?

At Osborne Clarke, we are helping businesses to understand both the risks and the opportunities that Brexit presents. To discuss how we can help you prepare for Brexit, please contact one of the experts listed in relation to the relevant area, or your usual Osborne Clarke contact.