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A two-week political battle to finalise a ‘new deal’ for Britain in the European Union began this week with proposals for an agreement published on Tuesday.
Prime minister David Cameron will seek to toughen the draft and convince EU-sceptics in his own Cabinet to back him ahead of an EU summit on February 18-19 to finalise a deal.
He is likely to call a referendum on whether Britain stays in the EU in June.
The speed of events means businesses can no longer ignore the implications of a British exit (Brexit). Abta noted this week: “Current opinion polls indicate an even split among UK voters.”
The association is working with management services group Deloitte on a report on the likely implications to be published next month.
The situation is far from clear, though no one expects the UK to leave immediately. A pro-Brexit vote would trigger lengthy negotiations on the terms of departure and future UK-EU relations. EU rules allow for two years of talks before withdrawal and commentators suggest it could take longer.
The impact could be extensive. Lawyers have identified business concerns on tax, employment, financial regulation, contracts, company law, cross-border issues, intellectual property, mergers and acquisitions, and more.
The Financial Times reported: “Law firms anticipate a vast amount of work, especially in rewriting corporate contracts.”
The newspaper identified the top concerns for business as “whether companies will have the same access to European clients and markets, whether EU nationals will be able to remain on staff . . . how abruptly the UK would leave the EU [and] whether an exit could disrupt immediate aspects of operations”.
Jean-Claude Piris, former director-general of legal services at the Council of the EU, noted last month: “EU treaties with third countries would cease to apply to the UK.
Britain would need to adopt new customs laws and tariffs and re-establish controls at borders, including with Ireland. Goods and services would be subject to EU tariffs.”
There could be implications for open-skies aviation deals such as that with the US, and the UK might have to review legislation to implement EU directives.
The uncertainty could affect the value of sterling, with Bank of England governor Mark Carney warning last week of financial instability and higher lending rates.
Abta is keen to understand the implications and held a meeting on the issue last month.
Head of public affairs Stephen D’Alfonso said: “We produced a discussion paper and invited a cross-section of members to identify concerns. We’ll launch a consultation in the next month, looking at things from the operating point of view, the customer point of view and the macro-regulatory view.”
D’Alfonso insisted: “It’s not Abta’s role to take a view. Abta will assess what leaving could mean for the industry. Individuals will take a personal decision in a ballot.
“Our role is to inform the discussion in the industry. That is what the report will do.”
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