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UK PM Announces Plan to Exit Single Market as Apple Blames Brexit for Price Hike

The British Prime Minister Theresa May has announced that the United Kingdom will exit the European single market -- a key tenet of the European Union that allows the free movement of goods, services…

The British Prime Minister Theresa May has announced that the United Kingdom will exit the European single market — a key tenet of the European Union that allows the free movement of goods, services and people between its 28 member states – as part of the government’s Brexit negotiations.

Unveiling her plans for Brexit, May said that she would push for the “freest possible trade in goods and services between Britain and the EU’s member states” but that the country “cannot possibly” remain within the single market as to do so would “to all intents and purposes, mean not leaving the EU at all.”

Prior to today’s speech in central London, the British government had said little about how it intends to exit the European Union, following last year’s historic referendum, which saw 52 percent of the country vote to leave.

Although exact details are still vague, May’s confirmation that the UK will leave the single market raises the possibility of tariffs and taxes being introduced for British companies trading with Europe (and vice versa), as well as restrictions on the movement of people and staff throughout the EU.


In specific regards to the music business, that could mean touring acts requiring separate and cost-prohibitive working visas for every European country that they visit, as well as tighter border controls and the mooted reintroduction of ‘carnets’ — customs documents that require the listing of every piece of equipment included in a touring production.

With the vast majority of vinyl and CDs sold in the U.K. manufactured in European countries, wholesale prices for physical product could also rise as a result of the U.K. leaving the single market, with any increase in import levies likely to cut into record company’s profits.

Brexit also brings serious implications for copyright law, with the EU’s vow to make user-generated services like YouTube pay more to rights holders as part of its Digital Single Market strategy only applicable to EU member states. May today confirmed that Brexit will mean the U.K. is no longer bound by jurisdiction and laws passed by the European Court of Justice.

One direct result of Brexit that is already having a serious impact on the music and tech industry is the sharp depreciation of the pound following the vote for Brexit. On the same day that May made her speech outlining the UK’s exit of the single market, Apple announced that it would be raising prices on its UK App store by almost 25 percent due to the weakness of the pound sterling to the US dollar.

Apps that used to cost £0.79 will now cost £0.99, bringing them closer in the line with the US app store. The price changes will roll out over the next seven days, with price increases for music and video downloads also expected to be confirmed in the coming months. Last fall, the tech giant hiked the price of MacBooks and desktop computers by around 20 percent, again, citing the currency fluctuations caused by Brexit.

“Price tiers on the App Store are set internationally on the basis of several factors, including currency exchange rates, business practices, taxes and the cost of doing business. These factors vary from region to region and over time” said Apple in a statement confirming the latest price rises.


Despite the sizeable hurdles to business that Brexit brings, the Prime Minister says that she will push for a “bold” free trade agreement with the EU alongside a “fair” customs agreement with its remaining 27 member states as part of the Brexit negotiations, which are expected to begin in March with the triggering of Article 50, formally beginning the process of exiting the EU.

May also said she would be seeking new trade agreements with countries outside the EU and confirmed that Parliament would get to vote on the final deal struck between the U.K. and EU before it comes into force.

“We are leaving the European Union, but we are not leaving Europe. And that is why we seek a new and equal partnership between an independent self-governing global Britain and our friends and allies in the EU,” said May announcing her vision for post-Brexit Britain.

“The U.K. music industry now knows that the government’s priorities for Brexit include both a tariff-free arrangement with the EU and new trade and customs agreements. What’s not yet clear is how the rest of the world will react,” Gregor Pryor, partner and co-chair of the entertainment and media industry group, at global law firm Reed Smith, tells Billboard.

“As one of the U.K.’s leading export industries, both culturally and commercially, we must hope that in the course of Brexit negotiations, the U.K. government will come good on its pledge to make it easier for our artists to do business around the world.”