Following rounds of unfruitful negotiations over the past years, and as the Brexit deadline on 1 January 2021 loomed, many companies were preparing for the implications of a no-deal Brexit. But just 7 days before the deadline, an agreement was finally reached. There are still many changes ahead, and companies will need to prepare for future delays and red tape, but at least the deal paves the way for a moderately better transition for industry and commerce. We consider some of the impacts:
Skilled labour availability
Even outside of Brexit negotiations the UK government has been revising its immigration policy to a points system aimed at attracting more skilled labour and excluding unskilled labour. For senior positions in engineering, project management and quantity surveying, candidates are likely to qualify under the new points system. However, with the new Brexit deal, foreign qualifications will no longer be automatically recognised. Candidates will have to apply for recognition of professional qualifications, and most will have to sit exams to verify skill levels.
Supply chain and materials certifications
The deal succeeded in allowing a tariff and quota free movement of goods and materials between the UK and EU, provided the goods meet the relevant rules of origin and related percentages allowed. However, while the EU will continue its CE certification of materials, this standard will no longer be recognised in the UK after 1 January 2022. This gives the UK one year to develop and effectively implement an equivalent standard. Many hope that the UK will align its certification to CE standards to avoid the need for double testing. However, for UK companies exporting materials to the EU, they will still need dual certifications in order to qualify for acceptance in the UK and EU.
Tenders and contracts
With new jurisdictions coming into effect, contracts for cross border projects may need to be reviewed and revised, particularly relating to dispute resolution clauses. Also, in terms of public procurement, the UK will move to its own tender system. Fortunately the deal allows for public procurement based on the WTO Government Procurement Agreement, which means that tenders can be opened between UK and EU governments and firms, although the volume of contracts being made available is likely to decrease significantly from previous levels.
As more details of the deal are finalised, there will hopefully be greater clarity for the industry, but at least companies are no longer having to wonder if there’ll be a deal or not.