Brexit: Trade in Non-financial Services (EUC Report)

Lord Aberdare Excerpts

Monday 18th December 2017 Lords Chamber

[Lord Aberdare (CB)]

My Lords, it is a great pleasure to follow four colleagues from the EU Internal Market Sub-Committee, and I share their great appreciation of the able chairmanship of the noble Lord, Lord Whitty. I hope I shall be shorter than I anticipated, since the noble Lord, Lord German, has made a number of the points I planned to make myself.

The inquiry looked at five categories of non-financial services. I will focus on aspects of two: digital and creative services, which are both sectors where the UK has considerable strengths and generates a significant surplus. Both are vital to our continuing success after Brexit. They foster innovation, enhance competitiveness, increase productivity and contribute to well-being and quality of life. They also share other characteristics: they depend on access to the best and brightest talent and skills available and they currently suffer from significant skills shortages.

They rely heavily on talented people from overseas, especially from the EU, and not just at the highest skill levels, such as recognised musical virtuosos, but at more modest levels such as orchestral musicians and even front-of-house staff. I hope that the Minister can confirm that the new immigration system after Brexit will be designed to ensure that the pipelines for such essential talent remain fully open. The doubling of the number of exceptional talent visas announced last month was a welcome start—but only a start. It does not cover, for example, freelancers in the digital and creative sectors.

Digital services depend heavily on the free flow of data, which is increasingly seen as a fifth freedom for the EU. The general data protection regulation comes into force next May to govern the transfer of personal data, among other initiatives to create a Europe-wide data market. The UK needs to ensure continued free flow of data to and from EU states after Brexit, so I welcome the Government’s commitment to putting the necessary infrastructure in place via the Data Protection Bill. Even so, it is my understanding that we will still need to obtain a so-called adequacy decision from the Commission, based on a full review of the UK’s domestic data regime to determine how the UK’s data protection landscape matches the requirements of EU law. What preparations are the Government making for obtaining such a decision and what are their expectations about the process for doing so and how long it will take? What transitional arrangements will be put in place in the meantime so that data flows can continue uninterrupted?

Perhaps the Minister could also comment on two other issues relating to digital services. First, mobile telephone roaming charges were abolished across the EU in June 2017. Can he assure us that there will be no return to roaming charges between the UK and other EU member states after we leave the EU? Secondly, the EU is pursuing an ambitious and wide-ranging strategy to create a digital single market. The UK has been strongly supportive of this and has been seen as one of its greatest likely beneficiaries. But there is some concern in the tech sector that, after we leave the EU, the strategy could be used to erect non-tariff barriers against UK businesses providing digital services in the EU. Can the Minister tell us how the Government will seek to ensure that the proposed UK-EU free trade agreement preserves the benefits of the digital single market for the UK, even after we are no longer involved in its future development? Can he confirm that we will remain in alignment with the EU regulatory framework for digital services during the transition period in order to provide legal and commercial certainty for businesses providing them?

I now move to the creative sector, and specifically to broadcasting and music. The sub-committee had a highly illuminating visit to members of the Commercial Broadcasters Association in Chiswick, including Discovery Networks Europe. From its UK hub, Discovery Networks broadcasts a wide range of channels to 135 different countries across Europe and beyond, in a variety of languages. It brings valuable jobs, investment, income, skills and technology to the UK. Its business model is predicated on the EU country of origin principle, whereby a single licence from the relevant UK regulatory body, Ofcom, enables it to broadcast throughout the EU. It can also access or bring into the UK the skills and expertise that it needs; it is not much good broadcasting to Latvia, say, if you do not have people with an understanding of the Latvian language and culture. Ideally, a future UK-EU trade deal would preserve these features, but at the very least broadcasters need assurance of a transitional arrangement enabling them to continue operating essentially as now for long enough to make necessary changes to their business model—which for some might involve moving part or all of their operations outside the UK. What advice can the Minister offer broadcasters as they plan their businesses for the future?

One of my own passions is music, especially classical music. As we have heard from the noble Lord, Lord German, this is another sector in which the UK is a global leader, and it, too, needs reassurance that its freedom to trade internationally will not be constrained after Brexit. As we heard from the noble Lord, touring is an important feature of the music sector for orchestras; for major UK acts such as Coldplay, Adele, the Rolling Stones and Paul McCartney, all of whom were among the top 10 grossing music tours of 2016; and for individual musicians and small ensembles. I will not repeat many of the comments that the noble Lord made, with which I agree, but will add two more questions for the Minister. First, what assurance can he give that orchestras and other musical organisations will continue to be able to tour in Europe without prohibitive extra costs and bureaucracy? Secondly, when does he anticipate that sufficient information about likely transitional arrangements will be available for music bodies so that they can plan their future touring programmes with confidence, bearing in mind that the planning cycle for orchestras is two to three years ahead, and for opera three to four years?

I have mentioned only a few specific issues within two of the services sectors covered in our report. There are many others, such as visa-free travel, often at very short notice; intellectual property and copyright protection; continuing access to or replacement of EU funding schemes; and ensuring that UK audio-visual productions remain recognised as European works. Our report highlighted that:

“To protect the UK’s status as a global leader of trade in services, the Government will need to secure the most comprehensive FTA that has ever been agreed with the EU”.


So my final question to the Minister is: what can he tell us about the Government’s approach to achieving such a ground-breaking services deal in a way that gives confidence and certainty to UK non-financial services providers so that they and we can capitalise fully on their exceptional strength and potential in international markets both within and beyond the EU?