Responding to Cabinet discussions at Chequers on the UK’s approach to the Future Economic Partnership with the EU, techUK has warned that a Brexit that effectively maintains membership of the Single Market for goods but not services would put the UK’s highly services-orientated digital economy at a serious disadvantage against their European competitors.

Commenting, techUK CEO, Julian David, said:

“It is right that the Prime Minister has sought to take the tough decisions needed to move the conversation about the UK’s plan for our post-Brexit relationship with Europe forward. However, as the Government itself has made clear, a goods only deal would reduce the access for services to the European market. Given that 80% of tech exports are services, and our biggest market remains the EU, this will have very real consequences.

“The UK tech sector does not see clear benefits of divergence with the EU. Indeed there has been a strong consensus to maintain alignment on crucial issues such as data protection. A goods only approach would risk UK based tech firms selling into Europe having to comply with two competing regulatory regimes and being unable to guarantee that services can be provided on the same terms to customers in different locations.

“Such a deal also ignores the increasing number of goods that rely on a services contract to operate where divergence would make it harder for UK digital-services businesses to be part of European supply chains.

“techUK agrees that we need a frictionless border for goods, but a Brexit based on goods alone is not one that plays to the strengths of the UK’s digital economy. It would create a lop-sided Brexit that causes complexity for business and confusion for consumers.”