Appendix 3: Call for evidence
The House of Lords EU Services Sub-Committee, chaired by Baroness Donaghy, has launched an inquiry into the future UK-EU relationship on professional and business services. The inquiry will consider the new EU-UK trading arrangements on professional and business services that are under negotiation. It will also look at other conditions that need to be put in place to support UK-EU trade in these services after the end of the transition period, in particular in relation to data adequacy. The inquiry will build on the work undertaken on professional and business services by the former EU Internal Market Sub-Committee, as part of a broader inquiry on trade in non-financial services in 2016–17 and again 2017–18.
The Committee invites interested individuals and organisations to submit evidence to this inquiry. The Committee is particularly keen to hear from practitioners and small businesses across the UK, including the regions and devolved nations. Written evidence is sought by 28 June 2020 at the latest, although the Committee would welcome submissions in advance of the deadline. Public hearings are expected to take place throughout June and July and the Committee aims to report to the House in autumn.
Diversity comes in many forms, and hearing a range of different perspectives means that Committees are better informed and can more effectively scrutinise public policy and legislation. Committees can undertake their role most effectively when they hear from a wide range of individuals, sectors or groups in society affected by a particular policy or piece of legislation. We encourage anyone with experience or expertise of an issue under investigation by a select committee to share their views with the committee, with the full knowledge that their views have value and are welcome.
Background
Professional and business services comprise a diverse range of knowledge-intensive activities and support functions that provide specialised support to businesses, government and other stakeholders. A non-exhaustive list of relevant professional and business services sectors includes: legal services, accountancy, auditing, architecture and engineering, advertising and market research, and recruitment and placement services. In some of these sectors, access to the profession is subject to specific legal requirements; this is the case, for example, for lawyers and accountants. In others, such as advertising, access is unregulated.
Taken together, professional and business services account for significant shares of the UK’s economy and trade in services with the EU as an important market. In addition, many professional and business services firms rely on skilled workforce from EU Member States.
While the UK has already left the EU, it remains part of the Single Market for the transition period. During this time, UK professional and business services providers can continue to operate in the EU as before, relying on the free movement of persons and services under the EU Treaties, the ability to exchange personal data freely, as well as a range of other EU measures which aim to reduce barriers to services trade among Member States.
The Government is currently negotiating the terms of the UK’s future trading relationship with the EU. Consideration is being given to new arrangements on trade in services, including professional and business services. These arrangements should cover (amongst other things): market access rights; temporary stays for business purposes; intra-corporate transfers of employees; foreign direct investment; the mutual recognition of professional qualifications. Both sides of the negotiations have published draft legal texts which outline their respective proposals in these areas: the Commission did so on 18 March and the Government’s texts were published on 19 May.
Should the UK and EU be unable to reach an agreement including PBS by the end of the year, UK-EU trade in professional and business services will come under the terms of the WTO General Agreement on Trade in Services.
The inquiry
The Committee seeks evidence on the following questions in particular:
- How important are the different UK professional and business services sectors to the UK’s economy and trade in services? Please include data where possible.
- What are the UK’s different professional and business services sectors’ key priorities for the future UK-EU relationship? What are the key priorities of smaller professional and business services providers and providers from the UK’s regions and devolved nations in particular?
- What preparations (if any) have UK professional and business services providers made, or planned to make, ahead of the end of the transition period?
- What provisions should the Government seek to negotiate to minimise potential barriers to trade, particularly for smaller professional and business services providers? What steps should the Government take to preserve the competitiveness and innovation capacity of the UK’s different professional and business services sectors?
- What type of arrangements should the Government seek to negotiate with the EU for the mobility of professionals?
- How important are arrangements on the mutual recognition of professional qualifications to professional and business services providers in the UK and EU? How could a future UK-EU agreement best allow for this?
- What provisions should the Government seek to agree with the EU on cross-border investment and rights of establishment?
- Should there be regulatory cooperation between the UK and the EU on professional and business services? If so, what form should such cooperation take?
- What lessons, if any, can be learnt from the EU’s existing trade agreements with other third countries including services, or negotiations on trade in services?
- To what extent could UK-EU trade in professional and business services continue in the absence of a UK-EU agreement covering services? How effective would the WTO General Agreement on Trade in Services be in supporting such trade, and what arrangements (if any) could be put in place to go beyond the WTO framework?
- If there were no reciprocal data adequacy arrangements in place between the EU and UK by the end of the transition period, what would the implications be for professional and business services providers?
- What opportunities (if any) could the UK’s withdrawal from the EU offer to the UK’s professional and business services providers?
You do not need to answer all of these questions.