BREXIT could damage the ability of police and security agencies to share information with European Union counterparts unless transitional arrangements are put in place, peers have warned.

Private firms, particularly in the services industry vital to the UK economy, will also be hit if there is a “cliff edge” when the UK leaves the EU’s data protection arrangements.

A cross-party House of Lords committee report hit out at the “lack of detail” produced by the Government on how it plans to ensure that data transfers can continue between the UK and EU after Brexit.

The EU Home Affairs sub- committee said the UK should seek to ensure that the Commission agrees an adequacy arrangement, certifying that the UK’s data protection is in line with that set by Brussels, allowing data transfers to continue.

But as such an agreement can only be signed with a third country, both sides will need to agree a transitional system to bridge the gap until a UK-EU deal can be reached after Brexit, or face the consequences of being unable to share information in the same way.

The peers warned: “In the absence of such transitional arrangements, the lack of tried-and-tested fallback options for data-sharing in the area of law enforcement would raise concerns about the UK’s ability to maintain deep police and security co- operation with the EU and its member states in the immediate aftermath of Brexit.”

There would also be a commercial impact from the “cliff edge” scenario of leaving the EU without transitional arrangements and subsequent adequacy agreement.

“Our analysis suggests that the stakes are high, not least because any post-Brexit arrangement that results in greater friction around data transfers between the UK and the EU could present a non-tariff trade barrier, putting the UK at a competitive disadvantage,” the report said.

The peers noted that the Government’s aim of maintaining “unhindered” data flows with the EU after Brexit could require the UK to continue to align its data protection rules with those set in Brussels, which it no longer has a say over.

Former diplomat Lord Jay, the committee’s chairman, said: “The volume of data stored electronically and moving across borders has grown hugely over the last 20 years.

“Between 2005 and 2012 alone, internet traffic across borders increased 18-fold.

“The maintenance of unhindered data flows is therefore crucial, both for business and for effective police co-operation.

“The committee was concerned by the lack of detail on how the Government plans to maintain unhindered data flows post-Brexit. It was concerned, too, by the risk that EU and UK data protection rules could diverge over time when the UK has left the EU.

“To avoid this, the committee urges the Government to secure a continuing role for the Information Commissioner’s Office on the European Data Protection Board.”