A new report published today (24 March 2021), ‘Beyond Brexit: trade in services’, flags up “significant gaps” in the TCA’s provisions for the UK’s services industries to operate in EU countries since the UK has left the European Union. “The TCA represents a major change from Single Market membership, introducing new non-tariff barriers to trade, and businesses have been required to adapt to this in a short space of time,” the report said. 

“The EU-UK trade agreement has secured important trade liberalisation in some areas of trade in services. However, there are some significant gaps,” said Baroness Donaghy (pictured), chair of the House of Lords’ EU Services Sub-Committee, which conducted the services inquiry.

Speaking exclusively with Recruiter, Baroness Donaghy said: “We’re concerned about the delays in decision-making on the future relationship… This leads to a period of uncertainty.”

Baroness Donaghy went on to say: “The difficulty is that that the infrastructure that was agreed under the TCA hasn’t been established… None of the commissions have been set up, no membership. Those committees were intended to build a constructive environment, to avoid compensation and help to assist in negotiations. They’re still talking about a memorandum of understanding on the financial services side, but that what’s likely is, it happens to be a fairly limited set of areas.”

The recruitment sector is not mentioned specifically in the report, which covers issues facing financial services, creative industries, data and digital trade, research and education. However, many of their concerns echo those of recruitment businesses, such as the “lack of a default mutual recognition of professional qualifications”. 

Evidence cited from the Professional and Business Services Council (PBSC) and the Department of Business Energy and Industrial Strategy (BEIS) warned “of a material risk that the lack of mutual recognition for some professions does start to impact the ability of firms to provide their services in the way in which they did previously”.

The Baroness said: “There will be real problems for UK professionals whose qualifications are not recognised in the EU under current arrangements.”

Other key points in the report are: 

• The creative industries sector has been hit hard by the Covid-19 pandemic and its recovery will depend to some extent on getting the relationship with the EU right.
• “Deep concern” about the potential impact of mobility provisions in the TC on the over 2m people employed in the creative industries, which could make touring prohibitively bureaucratic and expensive.
• The TCA offers “unprecedent co-operation” on digital trade compared with other EU free trade agreements, and it is expect that the EU’s draft data adequacy decision will be confirmed in the coming weeks.

The Baroness cited the so-called “national reservations” of the 27 different EU countries, in which each country imposes its own laws and regulations on how the UK can conduct business on its territory, as a key concern. “All of that adds to the complexity, uncertainty, paperwork and small businesses won’t have the resources to deal with these things,” she told Recruiter.

Recruiter reported recently [2 March 2021] that some UK-owned recruitment agencies were experiencing difficulties in Germany because of changing national requirements to conduct business there.
https://www.recruiter.co.uk/news/2021/03/recruiting-temps-germany-brings-new-problems-post-brexit-licences-being-revoked

Asked if she anticipated further hearings on resolving the UK services trade issues stemming from the post-Brexit environment, Baroness Donaghy said that her committee was coming to an end. “From the point of view of having further hearings, I don’t think that’s going to happen in the next couple of months until the new [House of Lords committee] structures are established, which is even more worrying when proper parliamentary scrutiny hasn’t been established, let alone the infrastructure between the EU and the UK. So, all these matters are leading to terrible uncertainty for the industries that we hope the report is supporting.”

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