NEWS16 January 2019

Marketing industry urges government to establish alternative Brexit deal

Brexit Data analytics Europe News Public Sector UK

UK – Following a landmark vote in the House of Commons yesterday, the prime minister’s deal setting out the terms of Britain’s exit from the EU was rejected in an historic defeat.

Brexit review 2018 disappointment_crop

Theresa May has said she will return to the Commons with an alternative plan next week – provided she survives today’s vote of no confidence. But with the UK set to leave the European Union on 29th March, uncertainty still abounds on what the departure could mean for the country’s marketing and data industries. Here, we bring together industry organisations’ views on Brexit.

DMA: A ‘no-deal’ Brexit could bring EU to UK data flows to a halt

Chris Combemale, chief executive, Direct Marketing Association (DMA)
In the wake of yesterday’s no vote in parliament, it is imperative that the government formulate a plan B and avoid a no-deal Brexit at all costs. A ‘no-deal’ Brexit would create severe uncertainty for the data and marketing sector and could potentially bring EU to UK data flows to a halt. This would have further knock-on effects on the public, with jobs moving to the EU and investment also decreasing.

The UK needs to be granted adequacy status by the EU Commission but the process can take years to complete. Adequacy status allows personal data to be freely exchanged, just like the UK currently does as a member of the EU. There must be a transitional period for the UK to gain adequacy status and therefore prevent disruptions to the free flow of data.

For example, a UK-based company that has EU customers may use an EU-based data centre, but the information is processed at the UK HQ. If the UK leaves the EU without a data deal this company would lose access to its own data, as transfers from the EU to UK would be prohibited. The company would need to find a new supplier or may move operations to the EU, so it can efficiently serve EU-based customers and not have to worry about transferring data. Therefore, it is vital that the free flow of data is maintained.

AA: It is important that the government quickly comes up with a viable alternative

Stephen Woodford, chief executive, Advertising Association
A ‘no-deal’ Brexit is hugely concerning for the UK advertising industry – a sector that contributes £132bn to British GDP. The meaningful vote result shows there is no majority support in parliament for the prime minister’s withdrawal agreement. It is important that the government quickly comes up with a viable alternative to reduce uncertainty for business and the UK as a whole. We would rather have no-deal taken off the table, given its potentially huge disruptive nature. Falling back to WTO terms would leave the industry facing a number of non-tariff barriers as most advertising restrictions around the world are rooted in domestic regulation.

Our position is that there are three essentials the government must negotiate as a minimum for the advertising industry: continued cross-border data flows; plurality of broadcasting channels to carry cross-border advertising; and a flexible migration system that allows continued access to the best talent. UK advertising has benefitted from a virtuous circle of attracting the world’s best talent attracting more business and in turn, that attracting more talent, creating jobs for international and UK people.

The UK is the world’s most internationally diverse hub for advertising, generating stellar growth in exports and a strong trade surplus in advertising services. The choices we make over the coming weeks will determine our post-Brexit success and if there is a flexible, business-friendly system we will have higher growth and stronger exports, than if we have a highly-restrictive regime, which would only benefit our international competitors.

MRS: Cross-border data flows are vital for the future survival of the sector

Dr Michelle Goddard, director of policy and standards, Market Research Society
The high levels of uncertainty on whether or not there will be a deal and, if so, what the data protection arrangements will be when the UK withdraws from the EU, pose significant challenges for the research, insight and data sector and for MRS members. Detailed guidance and tools from government and regulators that will facilitate future cross-border data flows are vital for the smooth running and future survival of a sector that is heavily dependent of free flows of data and on proficient interactions with European and international partners. 

Given the fast pace of the changing scenario MRS has adopted a practical stance, suggesting steps and procedures that will be of use in case of a no-deal scenario but that also are the most reasonable solutions for future operations. The MRS Brexit Hub contains the latest news, position statements and general advice for members, while MRS has also published EU-UK data transfers, a detailed guideline to help members and company partners comply with the requirements of the General Data Protection Regulation (GDPR) on personal data transfers, and a guideline on standard contractual clauses. MRS aims to provide tools and options to allow organisations to work towards the smoothest possible transition for personal data transfers. Upcoming publications will include: ‘Brexit and your employees, how to retain your talents'.

At this point in time, any indication or suggestion or prediction of the future is nothing more than speculation. But business is not as usual and organisations should be prepared and plan in advance. As MRS we strongly advise members to undertake a thorough analysis of internal operations and external relations with both clients and suppliers, and particularly focus on and adopt strategies for effective data flows and talent retention.

IPA: We have provided our agencies with comprehensive legal guidance

Paul Bainsfair, director general, IPA
Throughout the Brexit process, we have been working closely with the AA, planning for both a deal and ‘no-deal’ Brexit, to help us provide the best possible advice for our members. Despite last night’s vote, we still don’t know for certain what sort of Brexit we will have, but we have provided our agencies with comprehensive legal guidance to cover all possible scenarios.

There are still certain issues that must be addressed, and our biggest concerns remain around guaranteeing continued cross-border data flows and ensuring that we are still able to attract and retains the best talent from across the world. However, leaving the EU also provides real opportunities for the UK advertising industry to reassert itself as the best in the world and work more closely with markets including China and the US.

The IPA's latest Bellwether survey, published today, found that marketing growth had stagnated in the fourth quarter of 2018 as economic uncertainty surrounding Brexit continues.