EU Referendum: Procurement Legislation Implications
Tuesday May 31st, 2016
Rely on facts not feelings
On 23 June Britain will choose whether to remain in or leave the European Union. Although this is a decision not to be taken lightly, many companies are still unsure of the facts.
Deloitte’s 35th Quarterly CFO survey concluded that only 26% of CFOs said their companies had taken steps to prepare for the referendum result – a worrying figure considering the direct effect a Remain or Leave vote could have on UK business.
To help professionals understand how the vote will affect UK exports, trade arrangements, business finance, procurement legislation and jobs; procurement specialist BiP Solutions has created an impartial White Paper EU Referendum: The Ins and Outs for Business.
Here’s a sneak peek into the third chapter covering Procurement Legislation.
Procurement legislation simply means the laws that govern the buying and selling of goods; a subject close to the hearts of all professionals.
Remain campaigners claim deviating from the rules of the EU Procurement Directives could cause the UK to effectively exclude itself from the EEA single market and erode or even end London’s status as the financial capital of Europe, with strong negative impacts on the wider economy.
In its 2016 Report, The Economic Consequences of Brexit, the Organisation for Economic Co-operation and Development said: “A UK exit (Brexit) would be a major negative shock to the UK economy. In some respects, Brexit would be akin to a tax on GDP, imposing a persistent and rising cost on the economy that would not be incurred if the UK remained in the EU.”
However, Leave campaigners argue that a Brexit would give the UK a valuable opportunity to disregard some of the more costly aspects of EU procurement legislation and instead adopt a more business-friendly legal regime.
In its 2013 report, Our Global Future: The Business Vision for a Reformed EU, CBI said: “The impact of poorly thought-out and costly EU legislation is a major issue for businesses: 52% of businesses believe that, were the UK to leave the EU, the overall burden of regulation on their business would fall.”
Answering this claim, Remain campaigners in turn contend that many EU Directives are enshrined in UK law, so a Brexit is unlikely to alter the UK’s procurement habits.
Mills & Reeve National Head of Procurement Law, Ruth Smith, and Mills & Reeve Trainee solicitor Tom Benjamin wrote in Procurement Law Today: “Whilst the EU Treaty and EU Procurement Directives would no longer apply in the UK, an ‘out’ decision would have no impact on the validity of the UK legislation put in place to transpose those Directives.”
Even if regulatory reform were to top a post-Brexit government agenda, the Government would be unable to disregard EU Directives, should it wish to remain part of the EEA single market.
Should the UK leave the EU but wish to maintain its single market trade arrangement, it would still have to adhere to EU legislation, but would lose any power to shape this legislation.
Read more about the economic implications of the EU referendum, with EU Referendum: The Ins and Outs for Business.
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