As part of my work for Carnegie UK Trust on Brexit and the digital sphere I am considering the future of regulation during and post Brexit.
Economic activity in the UK digital sphere is profoundly shaped by regulation of telecommunications, intellectual property, broadcasting, data protection and more at EU and global levels and implemented by a highly international labour force. There are few signals from the government that they intend to make major changes to regulation post Brexit.
Even prior to the White Paper on the ‘Great Repeal Bill’ that describes the intention to copy across EU law, the message from the Department for Culture Media and Sport has been ‘steady as she goes, prepare for change’. The government has been working hard with its NDPBs and regulators or vice versa to suggest that, in regulatory terms things will stay much the same for the foreseeable future.
Reducing business uncertainty is necessary but. in my view this approach is not sufficient. Government will need describe a vision of how the UK digital sphere can actually benefit from Brexit itself if it wants to inspire confidence throughout the long years of negotiation. This is a subset of the wider vision Baroness Lane-Fox seeks.
The ‘steady as she goes work’ on regulation has been a substantial exercise by Whitehall, the digital NDPBs and regulators. The government has even gone so far as to promise completely new data protection legislation copying the EU in order to allow future trade in digital services. Industry and civil society have welcomed this, even though implementing GDPR won’t be pain-free. The Secretary of State demonstrated that DCMS can punch its weight a major new bill imposing EU law during the passage of Brexit.
The Intellectual Property Office has been clear throughout that Brexit will not see a major change in IP rules – their current factsheet is quite blunt. The Chief Executive of OFCOM tees-up Brexit as an opportunity to improve regulation, reducing burdens and improving consumer protection:
‘So leaving the EU presents an opportunity – indeed a necessity – to consider fundamentally whether those frameworks continue to serve the interests of all British people and businesses.’
Providing business certainty at a time of momentous change across such a broad front deserves congratulation for the Ministers and officials involved. That the prior regime wasn’t broken made things somewhat easier than in other sectors such as agriculture.
The trade bodies in the digital sphere have delivered some excellent work on Brexit. The digital industries’ major concern is the proportion of their skilled labour supply currently met from the EU, set against an historic digital skills gap. Prior to a wider government settlement on the EU nationals issue, there isn’t much the DCMS ministers can do to reassure. Ministerial statements from DCMS on labour supply stress that the sector is ‘a priority’ and that the government will do all it can to help the transition to the post Brexit world. But Ministers have stopped short of specific pledges for the digital labour force, preferring to speak in general terms:
‘the Government is absolutely clear that we want a settlement that allows us to attract the brightest and best global talent. This is a strategic priority.’
DCMS SoS , 22 March 2017 Launch of TechNation2017
Others sectors have had firmer, albeit unscripted remarks from their Secretaries of State on labour supply in construction, general low skills and agriculture, but it’s far from clear that these reflect the government’s current internal prioritisation. The government stresses that resolving EU nationals in the UK issues is a high early priority. However, the government took a decision early in the May premiership not to change radically the visa regime with India, another potential source of skilled labour for the digital sphere.
The ‘steady as she goes’ approach is a necessary bedrock to support a tumultuous process of Brexit but does not inspire people through change and uncertainty. As the UK exits the EU opportunities will arise and can be created to turn post EU regulation to the UK’s competitive advantage. Government should set out how it will create new advantage for the UK through regulation.
At a high level, in the areas of mature EU regulation such as telecommunications, broadcasting etc the government could signal its broad thematic priorities. The government could set out tactical opportunities – for instance the recent White Paper on the ‘Great Repeal Bill’ makes it clear that government will not ‘fossilise the past decisions of the CJEU forever’ and that Parliament can of course make new law to overturn CJEU precedent after exit. So can restrictive precedent such as ‘Wireless Prague’ be set aside for a new approach for government intervention in broadband in the difficult rural fringes within WTO state subsidy rules? The UK’s approach to EU procurement rules receive much criticism in the digital sphere where government is major buyer – will the UK seek a better approach to procurement within the WTO procurement rules? As unwieldy EU grant schemes fall away, often supporting digital research projects in the regions our workshops report, will the government design something more effective and efficient?
Put broadly – where is the vision for how the government can make the current EU digital regime work better, slicker, smarter, faster and remain compliant for trade purposes?
In areas of immature or emerging regulation or issues where there is little EU precedent such as artificial intelligence/machine learning the UK could set out how it regulate to help companies make the UK a world leader, firmly setting Hall and Pesenti’s work in a post Brexit environment where the UK can lead our EU trading partners from outside their club.
Ironically the EU Commission would probably welcome UK innovation as a spur to their own reforms.
Digital ministers, almost all former Remain campaigners are caught in a bind in providing a leadership vision – they need to set out a vision for the future of regulation in the digital sphere post Brexit, toe the line with regard to negotiations, keep a no doubt cautious No10 onside and remain credible by not over promising.
My own experience as UK official negotiating with the EU in the digital sphere was that the UK government should be open with its own side – the UK industry, consumer groups, nations and regions, technical experts etc – in forming a national position albeit in a discreet manner. The Secretary of State has nominated Minister of State Matt Hancock’s Digital Economy Advisory Group as the place to discuss Brexit issues. That’s the place for industry to push government for a post Brexit vision if the government doesn’t proffer one itself.
Disclaimer – the above are my personal views and do not represent those of any of my clients, including Carnegie UK Trust.
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