On 18 September 2018, the House of Commons Exiting the European Union Committee (the Committee) published their ninth report of session 2017-19, The progress of the UK’s negotiations on EU withdrawal (June to September 2018) (the Report).

The Report sets out the opinions and recommendations of the Committee on the progress of the UK’s negotiations with the EU since June 2018. Key points to note within the Report include:

  • the Committee regrets that the Government’s White Paper did not come sooner, as it arrived 17 months after the triggering of article 50;
  • the Committee urges the Government to set out its preferred arrangement for dispute resolution given that no agreement has been met over how disputes over provisions of the Withdrawal Agreement should be resolved;
  • the Committee believes a ‘no deal’ Brexit would be damaging for the UK economy – negotiations on the Withdrawal Agreement should be successfully concluded to provide certainty for UK and EU businesses and secure the 21-month transition period;
  • the Committee notes that the Government’s no deal contingency planning rests on the European Union taking reciprocal action to minimise harm, this assumes that sufficient goodwill between the two sides will exist to ensure that specific sectoral agreements could still be reached to minimise damage to the UK and EU economies. Michel Barnier ruled this out to the Committee, and the Government is requested to respond to his position. Even if both sides wanted to work together to find ways to mitigate the worst effects, the Committee notes that it is unclear if there would be enough time to negotiate, agree and implement any sectoral deals before the UK leaves the European Union;
  • the Committee calls upon the Government to publish the country by country assessments on EU member states’ economic interests that the Department has undertaken;
  • the Committee notes, with regards to services, that any increase in trade that is gained outside the European Union with third countries will need to compensate for any reduction in trade caused by the new barriers to Single Market access for UK businesses; and
  • the existing EU equivalence regime for financial services has its limitations. It does not cover all parts of the financial services sector, it would require the UK to be a rule taker, and it can be withdrawn unilaterally by the European Union at any time. However, the Committee supports the ambitious and pragmatic goal of securing an ‘enhanced equivalence’ regime.