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CBI warns over digital economy if Brexit hits data flow

By Andrew Woodcock

The UK's multi-billion pound digital economy is "at risk of isolation" as a result of Brexit unless the Government secures a transition agreement avoiding interruptions to the flow of data, businesses have warned.

The warning from the CBI came as ministers acknowledged that any disruption to cross-border data flows as a result of the UK's planned withdrawal from the EU could be "costly" for both Britain and Europe.

In the latest of a series of papers published ahead of the third round of Brexit talks in Brussels next week, the Government will set out proposals to ensure personal data can continue to be safely and effectively exchanged without imposing financial burdens on firms and consumers.

But trade body TechUK said it was unclear whether the Government's proposals would provide the legal framework needed for data transfers, and warned that securing the right arrangement could take 18 months or more.

The Government position paper being published today will say the UK's £119bn digital economy is reliant on the free flow of data, adding: "Any disruption to these cross-border data flows could be costly to both Britain and the EU."

The document will set out plans for a "unique approach" to ensure continued close co-operation between public authorities, law enforcement agencies and data protection regulators in the UK and EU. Any solution must allow data to be shared in a "safe and properly regulated" way while protecting privacy and offering stability and confidence to businesses, authorities and individuals, it will say. Digital Minister Matt Hancock said: "In the modern world, data flows increasingly underpin trade, business and all relationships. We want the secure flow of data to be unhindered in the future as we leave the EU.

"So a strong future data relationship between the UK and EU, based on aligned data protection rules, is in our mutual interest.

"Our goal is to combine strong privacy rules with a relationship that allows flexibility, to give consumers and businesses certainty in their use of data."

The CBI welcomed the Government paper as a "step forward" but warned failure to secure a deal could harm a sector which could be worth £240bn.

The organisation's director of innovation Tom Thackray said: "The strong alignment between British and European data standards opens the door to crafting a robust framework that enables the uninterrupted flow of data.

"In the short-term, a seamless transition deal is necessary to protect the free flow of information and provide legal certainty to businesses and consumers."

Belfast Telegraph