Announcement of EU/UK Trade and Cooperation Agreement allows no deal to be averted but significant change still imminent, says Committee

• The UK-EU future relationship: the Trade and Cooperation Agreement [PDF]
• Committee on the future relationship with the European Union

The report has been produced in order to inform MPs ahead of Wednesday’s debate and vote on the European Union (Future Relationship Bill) in the House of Commons. The Committee intends to undertake further scrutiny in the new year.

The report’s key findings include:

• Having an agreed deal in place is better than no deal

The Committee welcomes the announcement of an agreement reached in challenging circumstances, given that it ensures UK businesses and consumers will not face the prospect of tariffs from 1 January. Considering the interconnectedness and geographic proximity of the two markets, and their common interests, the importance of the agreement should not be underestimated.

• Significant change is still coming on 1 January

The report warns that the Agreement does not preserve current trading arrangements. It is therefore critical that the Government is clear in its communications to businesses, traders and communities about the terms of the deal and its implications.

• Both sides should implement the TCA and address remaining uncertainties

The Committee urges both sides to proceed with implementation and establish the new institutional arrangements set out under the Agreement. Priority should also be given to outstanding areas of uncertainty, such as equivalence for financial services and a data adequacy decision.

On enforcement, the Committee calls on the relevant authorities on both sides to support businesses through the implementation of new arrangements, rather than punishing them for unintended non-compliance.

• The compressed timetable for ratification is unavoidable but concerning

The complexity of the Agreement means it will take time for its contents and implications to be fully understood. One concerning consequence of the Agreement being reached so late is that Members of the Parliament have been left with very little time in which to read the TCA and the accompanying Future Relationship Bill, and reach a judgement on their contents, in time for Wednesday’s debate and vote. This means the TCA will not be subject to detailed scrutiny before a vote in the Commons, which is an unsatisfactory but now unavoidable outcome.

Chair's comments

Commenting on the report, Committee Chair Hilary Benn MP said:

“The announcement of a Trade and Cooperation Agreement should be welcomed, not least because it means that businesses will not have to face the economically damaging consequences of tariffs that would have resulted from no deal. Reaching an agreement also allows for future cooperation between the UK and EU on matters of mutual interest.

However, significant changes are still coming on 1 January when businesses exporting to the EU will face additional costs and customs checks. Uncertainty remains in areas such as financial services and data adequacy as the full implications of the end of the transition period become clear. The Government must ensure it has detailed answers to the questions facing citizens, businesses and traders as they adjust to life outside the Single Market and Customs Union.

With so little time to analyse the Agreement before today’s Parliamentary debate and vote, our report has been produced at great speed. We will continue our scrutiny of the Agreement, and its implications, in the new year.”

Further information

• About Parliament: Select committees
• Visiting Parliament: Watch committees

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