Bar Council: Brexit boost to small businesses as UK PLC risks losing EU procurement market

Here’s why

UK firms could find it harder to bid for billions of pounds worth of public authority contracts in other member states if we fail to negotiate access to the EU market, the Bar Council has warned in its latest set of plain-English guides on Brexit legal issues.

But, they say, there is an up-side. Getting rid of European red-tape after Brexit could help more small British businesses to bid for big government contracts.

Author of The Brexit Paper on Public Procurement, Rhodri Williams QC said: “Leaving the EU means the UK will be able to re-write its procurement rules and allow contracting authorities to support small businesses and social enterprises by broadening the range of social goals they are allowed to implement through their procurement powers.”

Rhodri Williams QC’s paper also cautions that whilst these changes might benefit some SMEs, the biggest risk is being shut out of the EU market.

“The UK public procurement market is valued at €345bn but is completely dwarfed by the EU market of €2015bn.

“If the Government wants to negotiate the fullest possible access to the EU, as well as to markets outside of Europe through the WTO scheme, the UK will need to keep the main body of procurement law the same as it is now, and follow closely EU law after the transition period. The EU will insist that procurement rules are aligned before market access can be granted.

“Existing procurement rules also provide a fair and transparent system which helps to meet UK value for money and anti-corruption objectives. This should not be lightly discarded.

“The Government has said it wants no role for the CJEU in the UK after Brexit, but if we want to keep procurement laws aligned, UK courts will need to take account of the decisions of the EU courts and incorporate them into our domestic procurement regime.”

The Brexit Papers

The Brexit Papers: Third Edition, published today offer Government, parliamentarians, the media and the public a concise and informative evaluation of the legal challenges posed by leaving the EU, and their practical implications for the economy and society.

A total of nine new papers are published as part of The Brexit Papers: Third Edition setting out in plain English the key legal challenges the Government will face on a range of policy issues including acquired rights, WTO, agriculture, fisheries, product standards, public procurement, environment, dispute resolution, and the CJEU.

They offer a series of recommendations to Government, and each can be read as a stand-alone document. 

Excerpt from Brexit Paper 19 – Public Procurement

A UK exit from the EU could therefore have economically mixed consequences in procurement terms. The UK would continue to benefit from WTO rights and may well in due course negotiate trade agreements with third countries, that approximate to the position achieved, or aspired to, by the EU in its trade deals. In addition, it would be open to the UK to adopt specific rules that either go further than, or derogate from, the EU rules in certain respects.

So long as UK legislation remains compliant with the WTO GPA rules, it could for example broaden the range of social goals that contracting authorities could seek to implement by means of their procurement powers; or further encourage authorities to contract with SMEs or other specific categories of supplier.

However, by leaving the EU, the 5 UK would, at least in the short term, lose the benefit of liberalised access to public procurement and other service markets under existing EU multilateral (and bilateral) arrangements, which the EU 27 would continue to enjoy.

The UK will presumably seek to accede to the GPA in due course, and it will also of course, seek to negotiate bilateral arrangements with third countries. It is far from clear, however, that the term s it could secure in any bilateral negotiations would be as favourable as the EU equivalent.