Regulation
Regulation
BETWEEN THE ROCK
AND A HARD PLACE
The likely impact that leaving the EU will have on Gibraltar-based businesses dominated KPMG’ s recent Gibraltar eSummit, where concerns over free movement and access to markets shared equal billing. Mark Essex reports
Mark Essex is director of public policy at KPMG in the UK. Mark now leads an intelligence team which analyses the impact of Vote Leave on business. Having published his forecast of a vote to leave of between 51 % and 53 % on 1 March 2016, June’ s result was no surprise to him. A relentless optimist, Mark is determined to originate upsides from the referendum result.
Brexit is the issue that won’ t stand still. As the UK government continues to negotiate with itself, parliamentary theatre continually provides surprises and the EU’ s chief negotiator points to his loudly ticking clock, it is hard not to feel exasperated. Business feels like it is trying to build a bridge to a land it can’ t see and so has no idea about what materials to use or where to put them.
Mark Essex from KPMG in the UK acted as moderator for a distinguished panel of experts at the recent KPMG eSummit in Gibraltar. Their task was to make sense of the Brexit landscape as it stands, and to understand the impact on Gibraltar and the gaming industry. The panel comprised Peter Montegriffo QC from Hassans, Peter Isola from Isolas, Jon Tricker from KPMG Gibraltar, Susan Breen from Mischcon de Reya and Samantha Barrass from the Gibraltar FSC.
Is no deal more or less likely? The announcement of transition in March this year provides some comfort to businesses, and Mark noted that in the UK business as a whole seems to have“ breathed a sigh of relief”. In the EU, transition has had the opposite effect with many European businesses finally realising that Brexit really is going to happen and consequently accelerating their Brexit plans. But how confident is Gibraltar that a deal will be struck?
Our first audience poll revealed 43 % thought a no-deal Brexit was more likely, 38 % less likely and 17 % thought it about the same.
Peter Montegriffo was not surprised that the audience was split.“ Transition is only agreed subject to everybody else agreeing everything else,” he commented.
And Samantha Barrass pointed out:“ The sheer complexity – even impossibility – of delinking the UK completely is only now beginning to sink in among populations.”
With so much of the detail still to be agreed, the panel concurred that businesses will be forced to wait until later to make the more difficult or irreversible decisions.
But they welcomed an increased sense of pragmatism and saw the potential for the negotiating parties to compromise sufficiently to at least achieve transition. There was less confidence that the parliaments, the ultimate decision-makers, would ratify such an agreement, though.
Border remains the number one issue Our second audience poll asked: Which of the following is the most important for Gibraltar operators( see Figure 1 below)?
Our audience showed remarkable consistency with their views of one year ago, with exactly the same proportion( 53 %) highlighting free movement of people across the border as the single biggest issue.
The results were not a surprise to the panel – 13,000 workers regularly crossing the border means that Gibraltar firms are exposed. However, our experts thought businesses should take comfort from two things: the reassurances being uttered from both sides, and the economic benefit that Spain receives from Gibraltar means it is in the interest of the Spanish government to keep the border fluid.
Peter Isola pointed to issues facing frontier workers such as the Spanish government becoming more effective at collecting taxes,
Figure 1: Audience poll results: what is most important for Gibraltar operators?
136 iGamingBusiness | Issue 111 | July / August 2018