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Buckingham Insurance August Bulletin

//Buckingham Insurance August Bulletin

Buckingham Insurance August Bulletin

This months bulletin is Brexit heavy as new developments have lead to some interesting approaches to border control. It seems that Brexit is not really Brexit as many of the policies seem to be aiming for a very similar model to our current arrangement with the EU. The questions have to be asked – is this really what Brexiteers voted for? And more importantly, are we in a position for the EU negotiators to accept our proposals in the first place?

Contents

1. Plans for Customs Controls after Brexit revealed

2. The EU – Irish border problem

3.  How GDPR will affect SME’s

4.  Petrol and diesel cars to be banned by 2040

5. Speeding fines becoming much more tough

 

1. Plans for Customs Controls after Brexit revealed

The long awaited Brexit policy paper regarding customs controls after Brexit has been revealed. The plan proposes an interim period almost identical to the existing customs union, with no specified end date. However the permanent arrangement will also “mirror” much of the existing system.

This paper is a concession to those worried about business and trade being disrupted –  although the EU’s chief negotiator Michel Barnier has stated that ‘frictionless’ trade is not possible without the single market or customs union. Without them there will always be checks at the borders. More than that, this compromise ‘interim’ period with the EU will delay the implementation of new trade deals with non EU countries. However, there has been a need to toe the line between greater freedom to negotiate more international trade deals and the economic impact of leaving the EU customs union.

The expectation of a long delay has riled both sides of the debate, with Brexit zealot Nigel Farage stating that the decision showed a lack of “decisive leadership” while Peter Mandelson dismissed the decision as “delusional semantics”.

However while the speculation around the customs union debate continues, what we do know is that whatever decision the government makes, our customs regulations will have to mirror much of the EU’s current system to avoid chaos at the ports. According to Whitehall officials, the permanent arrangement to be put into place after the interim period will be one of 2 options:

  • The first, more ambitious option “would involve the UK mirroring the EU’s requirement for imports for the rest of the world where their final destination is the EU”. This should mean that UK exports will be exempt from tariffs. This is unlikely as it would require a concession from the EU: giving the UK the benefits of being in the customs union, while being allowed to negotiate trade deals with non EU countries – which EU members are not allowed to do.
  • The second option is to apply many aspects of the current arrangement with countries outside the EU but use more advanced newer technology (e.g. number plate recognition) to try and avoid checks at the border.

Both these options would involve significant red tape for businesses and both options have been criticised by EU negotiators. This is because while mirroring the EU system would be our best option, it would involve negotiating (but not implementing) trade deals with non EU countries. The other option also isn’t popular as previously British customs officials have been inefficient at tackling fraud and failing to trace the origin of goods – we are currently facing a €2bn fine over a exports scam flooding the EU market with illegal Chinese goods – France, Germany and Spain have lost an estimated €3.2bn from 2013-16 VAT revenues as a result of British failure.

2. The EU – Irish border problem

Brexit also represents significant challenges for the Irish border as putting physical posts and fortified checkpoints would be incredibly hard to monitor and reminiscent of the “Troubles”.  The government is proposing that because 80% of firms in Northern Ireland are small to medium and engage in local trade, the most effective way to deal with them is to leave them alone with no need for complicated bureaucracy. Technology such as number plate recognition will then be applied to the bigger firms who want to engage in overseas trade.

While this will help things stay much the same as normal, many worry that Northern Ireland will become a “back door” for immigrants looking to get into the UK. So much will have to be done to get round this problem. To many, a Donald Trump style solution would be seen as a bit extreme! Furthermore, thousands of people cross the borders for trade every day.

Passport checks will also be unlikely as all 3 entities involved in the decision have committed to the idea of an invisible border: EU, British and Irish governments. However experts have dismissed the idea of a “frictionless” border as “fantasy”.  While the British government can decide not to have identifications and checks, Ireland requires those not in the single market to be checked under EU law. The extent of these checks is not known, however they will be electronic and rely heavily on new technologies. These will be quicker and more efficient – however will likely take longer to implement than the proposed March 2019 deadline.

3. How GDPR will affect SME’s

A significant issue for the many small and medium businesses we work with here at Buckingham Insurance. If you are one of them, you may have heard of the new GDPR (General Data Protection Regulation) regulations coming in May 2018, creating significant changes to the way you handle customers and third party data. There’s been some unofficial rumours floating around that if you are a smaller company you do not need to abide by GDPR. This is wrong, and the Information Commissioners Office has confirmed that the new legislation applies to everybody – “If you are currently subject to the DPA, it is likely that you will be subject to GDPR”. As a rule, any bit of data that can be used to identify a customer will be subject to the new regulations.

So what is GDPR?

GDPR is the new guidelines for data protection that will come into play in May 2018, making your company more accountable for the handling of personal information. In brief, it requires organisations to gain clear consent to use people’s data and to inform the customer of the reason data is collected. There’s a difference between the amount of detail your records have to contain if your company is fewer than 250 employees – hence the confusion on the internet. Those with fewer than 250 employees must hold records where the data being processed could risk somebodies rights/freedoms, or where that data relates to criminal convictions and offences. You are only exempt from the extra record keeping duties in circumstances where only a small amount of personal data is kept.

Pseudonymised data is still able to be used, as long as the person the data belongs to cannot be traced back to a pseudonym.

Do I need a data protection officer?

If the central function of your business is the “regular and systematic monitoring of data subjects on a large scale” then you should appoint a data protection officer. If you collect large scale records of data such as criminal convictions, political opinions, ethnicity, trade union membership, sex life, health or sexual orientation then you must also appoint one. However you may employ one data protection officer between “a group”, as long as the officer is readily available to each organisation.

GDPR, cyber-attacks and data breaches

One of the most talked about aspects of GDPR is the huge fines associated with non-compliance. Up to €20 million (£17.5 million) or 4% of global turnover (whichever is greater) will be the punishment if you are found not to have taken proper measures against data breaches. This is particularly prevalent because of the increase in cyber-attack based data breaches at the moment. See our July bulletin for more information on the rise of cyber crime.

In the event of a data breach you will be obligated to inform the authorities and the people whose data has been stolen. There is a Legal obligation to disclose a data breach within 72 hours.

You may have read about the cyber-attack epidemic in last month’s bulletin. The GDPR makes these kind of attacks much more important to protect against, particularly as it widens the responsibility for data breaches to all firms in the supply chain. This means that if you are a small company supplying a larger company, you will be under huge pressure to quickly change the way you handle data. We all know that businesses – SME’s in particular – sometimes overlook some aspects of cyber security. According to research done by the Ponemon Institute in 2016, only 14% of small businesses rate their ability to mitigate cyber risks and attacks as effective. Keeping all your data on one IT infrastructure makes it much easier for hackers to steal valuable data that may mean not only reputational damage for your business but a large fine.

Will it apply after Brexit?

Short answer – yes. The government has made it clear that the decision to leave the EU will not affect the implementation of GDPR.

 

 

4. Petrol and diesel cars to be banned by 2040

 

Petrol and diesel cars are to be banned by 2040 because of their contribution to poor air quality. According to the Royal Colleges of Physicians and of Paediatrics and Child Health, 40,000 premature deaths a year are caused by air pollution. The vast majority of air pollution comes from our petrol and diesel cars, as well as factories.  Nitrogen oxides from car exhausts regularly breach safe levels, with diesel being the number one source of air pollution from road going vehicles. However hybrid cars are not scheduled to be banned.

The claim that air pollution cuts short 40,000 lives a year is based on statistical research, however about 11,000 of the deaths attributed to nitrogen dioxide and other contaminates are estimates. This is because of the complexity of linking this kind of pollution to illness. However there is no question that air pollution presents a significant risk to human lives, with some experts even going so far as to say that the 2040 ban on all petrol and diesel cars is “too little too late” to stop the pollution. Greater London often reaches more than double the legal limit of nitrogen dioxide (40 micrograms per cubic metre) with Middlesbrough, Halton and Birmingham following behind. These are clearly dangerous levels of nitrogen oxide – with London Major Sadiq Khan stating that people “can’t afford to wait” for safer air. And the ban is being lauded by some as a distraction from failings in the short term pollution policies. That being said, the government has promised £40m immediately to start the implementation of local schemes.

What’s more the significant change in infrastructure as well as the cost of replacing cars will be paramount. Charging posts will have to be set up around the country and these are expected to put significant pressure on the National Grid as more and more people convert to hybrid and fully electric cars – particularly during rush hour where many cars will be charging at the same time. Additionally, the cost of replacing electric car batteries at the moment is high and the change in technology may mean higher repair bills – although whether this will be the case in 2040 is doubtful.

Furthermore, many are unhappy with the changes for good reason – as it was the government that encouraged the change to diesel cars in the first place! Many are angry that the plans do not address pollution from other sources – such as construction and farming.

The government has also been criticised for not offering any help to replace older, less efficient cars with more modern cars with lower emissions (e.g through scrapping schemes). However some companies have introduced their own incentives. Ford has become the latest company to do this – if you have a pre-2010 Ford, you may trade it in in return for £2000 towards a newer model. Your old car will be immediately scrapped, helping to contribute to cleaner air.

5. Speeding fines becoming much more tough

In 2013, 2064 people died as a result of speeding, directly or indirectly. The speed limits are there for a reason – the risk of death is around 4 times higher when a pedestrian gets hit at 40mph than 30. The new speeding fines reflects that risk and represents the danger that speeding represents to drivers and pedestrians.

So what are the new fines?

  • Zero tolerance policy for repeat offenders who will automatically receive 3 or more points on their licence.
  • No more fixed fines – instead the fine will range from 50 – 150% of your weekly income. 50% for band A, 100% for band B and 150% for band C on average.

Mitigating factors will be taken into account (e.g. speeding due to an emergency) however the fine will not be erased totally.

There is a cap on the fines: £2500 for motorways and £1000 anywhere else.

 

References

 

By | 2017-08-30T12:43:05+00:00 August 30th, 2017|2017|0 Comments