Reflecting on the Chequers Agreement

Notwithstanding the events of the last 48 hours, the Cabinet’s agreement on Friday on what the UK’s relationship with the EU should be post-Brexit, is a significant step forward. After two years of broad generalities from the Government about seeking an agreement that delivers frictionless borders, it's encouraging to see a degree of clarity around how the Government sees the future. There is finally a sense that a process is underway to address the detailed concerns of businesses.

However, we shouldn’t lose sight of the fact that the Chequers agreement just sets out the broad outline of the UK Government’s position, which must now be negotiated with the European Union. It is also very focused on goods and the customs arrangements that will need to be put in place - including to avoid a hard border with the Republic of Ireland. There is little reference to services, which makes up a significant proportion of our trade with the European Union.

There will be more detail to follow in a White Paper, which the Government has committed to publishing either later this week or early next week. I hope that this will address the concerns that ICAEW and the European accountancy profession have raised - of the risks of legal uncertainty, especially in relation to the validity of audit reports, as well as of a proliferation of overlapping regulatory requirements which will ultimately impact on individual businesses and markets overall.

In the meantime, businesses should continue to put in place contingency plans for a no-deal scenario. Whilst the prospect of such an eventuality may have receded with the Chequers agreement, there is no doubt that the negotiations will be complex and time is running out.

Anonymous
  • The Chief Executive's blog on Brexit issues is like the calming voice of reason in a time of unprecedented change. As a member of the non-financial community, I find it really helpful. No doubt there is work to do, but it seems less daunting when addressed with cool logic as Michael Izza does. Thank you.