The UK and EU have reached a new milestone in the ongoing Brexit negotiations, agreeing on a “large part” of the agreement that will eventually lead to an “orderly withdrawal”.
Although some issues still remain, Michel Barnier and David Davis, the Brexit negotiators, have said the deal represented a “decisive step” in the overall process.
As a result, the transitional period is now set to last from 29th March 2019 until December 2020.
Barnier also said an agreement on the rights of EU citizens in the UK – and the 1.2m UK citizens residing across the EU – had been reached.
As part of this, EU citizens arriving in the UK during the transition period will be able to enjoy the same rights and guarantees as those who arrived prior to Brexit. This is likely to be welcomed by many UK tech entrepreneurs who have previously expressed concerns on Brexit’s impact on tech talent.
Antony Walker, techUK deputy’s CEO, commented on the news, saying this was a welcome step “to give businesses the certainty they need”.
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“However, both sides should not be complacent having formalised a transition period and must now ensure we have not simply kicked the can down the road leaving a Brexit cliff edge on New Year’s Day 2021.
“Talent is a key driver of a successful UK tech sector and EU citizens are at the heart of that. We therefore strongly support the ability for EU citizens to continue to come to the UK to take up jobs in the tech industry and drive innovation and growth here in the UK.
“The tech sector will however be concerned that there remains no formal agreement around the ongoing ability to deliver the free flow of data during the transition period. It needs to be clear that the UK is not a ‘third country’ when it comes to free flow of data during the transition. Delivering a close ongoing relationship that allows data to flow freely, and giving the Information Commission a role in shaping future changes to data protection rules, must be a top priority between now and the final agreement in October.
“The joint agreement today is a positive step, but there is a huge amount of work to do to minimise the disruptive impact of Brexit and to give tech companies the confidence to keep investing in the UK.”
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The UK will also be allowed to negotiate and sign trade deals during the transition period and both the UK and the EU hope the terms of the agreement on the time frame can be approved by Theresa May’s fellow leaders at an EU summit this week.
Effect on sterling
Unsurprisingly, the announcement served to elevate the price of sterling, as the pound hit a two-month high against the euro rising by 0.63%, with one pound equalling €1.1413.
The pound also jumped against the dollar, rising by 0.68% to $1.4037.