UK Industry Warns of Brexit Impact

The Confederation of British Industries (CBI) has concluded that it is very important for UK business to continue with some business practices even after the country's scheduled exit from the European Union on March 29 2019. In a report Smooth Operations published April 10, it listed the rules that will affect the economic fortunes of the UK. 

The report is based on thousands of conversations with UK businesses, as well as dozens of leading trade associations and was compiled over a six-month period. It says Brexit presents opportunities for rule changes in sectors such as agriculture, shipping and tourism that could ultimately benefit the British economy and consumers.

Energy however is not in that group, and the report warns that "opportunities for divergence are vastly outweighed by the costs of deviating from rules necessary to ensure smooth access to the EU market."

Another important finding is that changes to rules in one sector have significant knock-on effects for companies in other sectors and throughout supply chains. The main regulatory needs of the energy sector are:

• Barrier-free access and appropriate regulatory convergence with the internal energy market will be important to ensure that the UK and the EU can continue to trade energy effectively;

• Bespoke regulatory co-operation to preserve the integrated single electricity market is also critical to protect the interests of business and consumers in the Republic of Ireland, Northern Ireland and Great Britain;

• The UK’s ongoing influence in key EU agencies and bodies would allow both sides to manage regulatory alignment, as well as appropriate flexibilities around future rules;

• Additionally, the benefits of the UK’s membership of Euratom should be maintained, whether through continued membership or new arrangements, to ensure nuclear can continue providing clean energy to the UK;

• And, the UK should ensure full participation with the EU Emissions Trading System until the end of 2020, with at least equivalence thereafter, to help UK’s efforts to decarbonise, supporting the wider European work.

CBI Managing Director of Infrastructure and People Neil Carberry said: "The experience-based evidence of companies across the country will be essential in the months ahead, as it is critical that negotiators understand the complexity of rules and the effects even small changes can have.

“In a rapidly changing world, a close relationship between the UK and the EU on energy objectives is in the clear interests of both sides. Alignment with EU energy and climate change rules will help achieve secure, an affordable and low-carbon energy supply for customers, as well as help the sector, which supports one in forty-eight jobs across the UK.”

The CEO of energy suppliers' association Energy UK, Lawrence Slade, said the future EU-UK agreement should extend to a close trading relationship in energy and "the internal energy market is a collaborative project with a long-term vision. It has delivered clear benefits to EU and UK customers and is vital in supporting the single energy market on the Island of Ireland. This is why Energy UK is leading calls for a comprehensive Energy and Climate chapter as part of the future agreement, advocating close collaboration and alignment.”