Economic Report 2017

E C ONOM IC R E P OR T 2 0 1 7 E C M C R E P R T 2 0 1 7

Wotential nonͲtariĨĨ ďarriers to trade include͗

• Mobility of labour ʹ OĨ the ϯ00,000 ũoďs suƉƉorted ďy the industry, more than halĨ are emƉloyed either directly ďy oil and gas comƉanies, or indirectly through the suƉƉly chain ;see section ϯ͘ϯ Ĩor more detail on industry emƉloymentͿ͘ Around 10 Ɖer cent oĨ that ǁorŬĨorce comes Ĩrom outside oĨ the UK, ǁith around halĨ oĨ these non- UK w or ke r s com ing fr om t h e E U and m ay b e affe ct e d b y any ch ange s t o im m igr at ion p olicy p ost - Br e x it . A r ound 7 0 p e r ce nt of t h e se w or ke r s fr om w it h in t h e E U ar e h igh ly skille d and h old m anage r ial or t e ch nical r ole s in t h e indust r y . A ny b ar r ie r s t h at p r e v e nt t h e ir fr e e m ov e m e nt could not only incr e ase associat e d e m p loy m e nt costs and comƉliance administration, ďut also Ɖotentially undermine Ŭey Ɖroũects and oƉerations͘ • Customs processes ʹ W it h t h e UK no longe r an E U m e m b e r st at e and unlike ly t o r e m ain p ar t of t h e C ust om s Union, UK goods could Ĩace customs checŬs at U ďorders͘ Any delays or added ďureaucracy in sourcing goods or se r v ice s w ould b e unw e lcom e and could e v e n r e sult in unp lanne d op e r at ional sh ut dow ns in e x t r e m e case s. It could incr e ase t h e p h y sical cost s of t r ade and m ay ult im at e ly influe nce com p anie s t o sour ce goods and se r v ice s fr om ot h e r nat ions. • Regulation and technical standards ʹ The Great ZeƉeal ill ǁill looŬ to transƉose all edžisting U laǁ aƉƉlying to the UK into UK laǁ directly ;ǁhere ƉracticalͿ͘ ,oǁeǀer, the Ĩuture relationshiƉ ďetǁeen the UK and the U ǁill gov e r n t h e e x t e nt t o w h ich t h e UK can am e nd or r e p e al any law s or r e gulat ion and m ay r e sult in t h e UK de v iat ing fr om t h e E U. T h is could incr e ase t h e com p liance b ur de n for UK b usine sse s if ov e r se as t r ading p ar t ne r s insist on additional Ɖrocedures such as certiĨication, testing and insƉection͘ Oil & Gas UK has emƉhasised the need Ĩor Ɖredictaďility Ĩor the industry, Ɖarticularly at a time ǁhen commodity p r ice s ar e v olat ile . W e h av e r e com m e nde d t h at t h e UK Gov e r nm e nt p r ior it ise s t h e follow ing dur ing Br e x it negotiations͗

• M aint ain fr ict ionle ss acce ss t o m ar ke t s and lab our • M aint ain a st r ong v oice in E ur op e for t h is indust r y • P r ot e ct e ne r gy t r ading and t h e int e r nal e ne r gy m ar ke t

T h e gov e r nm e nt can h e lp t o dr iv e gr ow t h in t h e indust r y and Br e x it p r ov ide s an op p or t unit y t o p r om ot e t h e se ct or int e r nat ionally . Oil & Gas UK ur ge s p olicy m ake r s t o m anage Br e x it in a w ay t h at sup p or t s t h e indust r y and it s long- t e r m goals t o m ax im ise e conom ic r e cov e r y of indige nous oil and gas r e sour ce s.

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