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21st July 2016

Risks and opportunities of Brexit

Leading business, legal, academic and political commentators came together in London last week to discuss and debate the possible impact of the UK’s decision to exit the European Union.

A high-profile panel – including current and former government ministers, international and EU trade lawyers, and university professors – gathered at the offices of leading chambers, 11 KBW, for the “Britain after Brexit – Where Next?” event.

Also joining the discussion was Jeremy Nixon, employment partner at leading commercial law firm Thrings.

In a wide-ranging debate, Rory Stewart MP, recently appointed as minister of state at the Department for International Development, urged Britain to “find the will to push ahead with Brexit”. But to achieve this, he said the Civil Service would need to “build capacity” and the Foreign Office to “double its budget”.

Meanwhile Lord Warner of Brockley, Labour health minister in Tony Blair’s government between 2003 and 2007, highlighted some of the potential risks that Brexit poses for the health service in terms of falling GDP and the proportion of doctors and nurses in the UK which are drawn from overseas.

Dr Wendy Piatt, director general of the Russell Group – which represents 24 leading research universities – also expressed concerns that Brexit could prejudice research funding and collaborative projects between British and European universities.

Other talking points from the debate included:

•Professor Keith Ewing, Professor of Public Law at King’s College London, set out his view that legally there was no obligation for a Parliament vote prior to the UK invoking Article 50 of the Lisbon Treaty (and, in doing so, formally triggering Brexit).
•Miriam González, international trade lawyer and partner at Dechert LLP, said the UK needed to get three things right: its continued relationship with the EU, its bilateral relationships with other trading partners, and its relationships with other international organisations such as the World Trade Organisation (WTO).
•Ms González added that the UK needed to clearly set out what sort of relationship it wanted with the EU and the model it could adopt. She said possibilities included those used by Norway (European Economic Area model), Switzerland (European Free Trade Association model), Turkey (Customs Union model), the so-called Canadian model, and relying on its own membership of the WTO.
•Giles Williams, partner at KPMG and a regulatory expert, highlighted the financial services’ annual contribution to the UK economy in terms of exports (£20 billion), describing the continued passporting for UK-regulated products as “vital”.
•Williams pointed out that much of the regulation applicable to the financial services sector arises from the UK’s membership of the G20 rather than the EU. He also stressed the importance of gathering detailed data and evidence to be placed before the European Commission as part of Brexit negotiations, adding that if the UK did not get it right, many financial services companies could decamp to New York.
Following the historic vote on 23 June, the UK remains eager to understand the impact of Brexit and its future trading relationship with the EU. Thrings will continue to monitor developments, consider the possible legal implications, and offer insight, advice and guidance during these unprecedented times. For more information, visit the Business of Brexit section of our website.

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