More than 100 UK businesses have signed a letter to the Brexit Secretary, David Davis, urging him to ensure that ‘urgent progress’ is made in the next round of Brexit talks.
The letter calls for Mr Davis to make sure that transitional arrangements are secured.
Signatories of the letter represent ‘businesses of all sizes, sectors and regions of the UK’, and have responsibility for over 500,000 jobs in the UK and 600,000 jobs in the EU.
In the letter, the businesses state that they need to make investment and employment decisions now that will have consequences for economic growth and jobs in the future.
The businesses affirm that, until transitional arrangements can be agreed upon, the risk of the government failing to secure a Brexit deal ‘remains real’. The firms therefore want ‘substantive progress’ to be made in the upcoming negotiations.
Commenting on the issue, Carolyn Fairbairn, Director General of the Confederation of British Industry (CBI), said: ‘Businesses are deeply concerned about Brexit and getting more so by the day. Not about the fact that Britain’s exit from the EU is happening – they’re fully committed to making it work. The concern is how we do it.
‘The top priority is to open talks on a ‘status quo’ transition for business, lasting two to three years. That will clear a path to discussing the main prize: trade between the UK and the rest of the EU.’
The letter can be read in full here.
The British Retail Consortium (BRC) has urged the government to secure an advantageous customs deal with the EU ahead of Brexit in 2019.
The BRC warned that agreements must be put into place in order to avoid goods being held up at borders. It suggested that delays or disruption could lead to rising prices, reduced availability on shelves and an increase in waste.
Investment in ports, roads and transport infrastructure should be prioritised to ‘get systems ready’ for the day when the UK leaves the EU in 2019, the BRC stated.
Helen Dickinson, Chief Executive of the BRC, commented: ‘A strong deal on customs is absolutely essential to deliver a fair Brexit for consumers.
‘Whilst the government has acknowledged the need to avoid a cliff edge after Brexit day, a customs union in itself won’t solve the problem of delays at ports.
‘So to ensure supply chains are not disrupted and goods continue to reach the shelves, agreements on security, transit, haulage, drivers, VAT and other checks will be required to get systems ready for March 2019.’
The government recently published a Brexit customs position paper, which set out two approaches: a ‘highly streamlined’ customs arrangement between the UK and the EU, and a new customs partnership with the EU.
A second paper outlined proposals to ensure that existing trade in goods and services can continue after the UK leaves the bloc.
The government has outlined new arrangements for the protection and exchange of personal data between the UK and the EU once Britain has left the bloc in 2019.
A ‘unique approach’ to data protection and data sharing between the UK and the EU has been put forward by the government, which will help to ensure ongoing competitiveness, job creation and innovation.
The approach would reflect the ‘unprecedented alignment’ between British and European law, and will put into place ‘high data protection standards’ at the point when the UK leaves the EU.
A new UK-EU model for exchanging and protecting personal data has been put forward by the government, which will permit information to continue to be exchanged in a ‘safe and regulated way’, and continue to protect individuals’ privacy. The government stated that the model won’t impose ‘unnecessary additional costs to business’.
Commenting on the approach, Matt Hancock, Minister for Digital, said: ‘The UK is leading the way on modern data protection laws and we have worked closely with our EU partners to develop world leading data protection standards.’
However, the Federation of Small Businesses (FSB) has warned that small firms require support to ensure that they are ready for new data protection rules. The General Data Protection Regulation (GDPR) is set to come into effect in May 2018, and will require businesses to safeguard the collection, storage and usage of their clients’ personal data.
Mike Cherry, National Chairman of the FSB, said: ‘We know that many small businesses have concerns about the incoming GDPR and many are simply unaware of the scope of the changes. There is a clear and present danger that companies could inadvertently face a fine if action is not taken to provide support and guidance to help them properly prepare for data protection changes.’
Chancellor Philip Hammond has suggested that the UK won’t cut taxes and fiscal regulations after Brexit.
The Chancellor stated that the UK will remain within the ‘EU average’ in terms of tax rates, and will not seek to reduce taxes in a bid to become more competitive.
He commented: ‘I often hear it said that the UK is considering participating in unfair competition in regulation and tax.
‘That is neither our plan nor our vision for the future.
‘I would expect us to remain a country with a social, economic and cultural model that is recognisably European.’
In January, Mr Hammond stated that the government may have to ‘change its economic model’ if the UK was unable to remain in the EU single market.
He commented: ‘We will change our model, and we will come back, and we will be competitively engaged.
‘I personally hope we will be able to remain in the mainstream of European economic and social thinking. But if we are forced to be something different, then we will have to become something different.’
The Chancellor’s recent statements come amid ongoing Brexit negotiations, with government officials debating the free movement of EU citizens in the UK.
A survey carried out by the Institute of Chartered Accountants in England and Wales (ICAEW) has suggested that just 43% of firms have discussed the risks that Brexit poses to their business.
The ICAEW found that only 29% of businesses surveyed have made Brexit plans. 6% of firms expect a positive Brexit outcome, whilst 40% predict that EU negotiations will have a negative impact on their business.
Additionally, only 21% of firms surveyed would be willing to explore new markets.
The research also suggested that 29% of businesses believe that the free movement of goods, services and capital between the UK and the EU is essential for growth. One fifth of respondents stated that they also value access to a skilled EU workforce.
Michael Izza, Chief Executive of the ICAEW, said: ‘With 20 months until departure, it is now the government’s responsibility to help pave the way for business success once we have exited the EU.
‘Issues raised within our research – such as access to skilled EU workers and the free movement of goods and services – should be firmly placed on the Prime Minister’s radar when she engages in talks with the EU to ensure the priorities of business are fully considered and complacency is avoided.’
The government has created a new business advisory group, comprised of five major UK business groups.
The Confederation of British Industry (CBI), the Federation of Small Businesses (FSB), the British Chambers of Commerce (BCC), the Institute of Directors (IoD) and manufacturers’ organisation the EEF make up the new business group, and their director generals will meet weekly with the Business Secretary, Greg Clark.
During a recent parliamentary session, Mr Clark reported that he had met with businesses, business leaders, employees and investors around the UK since the Brexit vote. The new group will seek to ensure that business has more input into the Brexit negotiations.
Dr Adam Marshall, Director General of the BCC, hopes that the new business advisory group will also help to achieve a ‘business-friendly’ Brexit outcome that addresses firms’ ‘real-world needs’.
Commenting on the creation of the new business group, Mr Clark said: ‘The government is creating a new EU exit business advisory group to ensure business is not only heard, but is influential throughout the negotiations.’
Meanwhile, Stephen Martin, Director General of the IoD, stated: ‘A good Brexit outcome is one that puts the economy, jobs and prosperity right at the centre of the negotiations, so we wholeheartedly welcome the formation of this advisory group by the government.’
The Queen has delivered her annual speech at the state opening of Parliament, in which she outlined the government’s legislative agenda.
This year’s speech differed to speeches given in previous years: it outlined the government’s legislative plans for the next two years, as opposed to one.
Earlier in the week, the government took the decision to cancel the 2018 Queen’s Speech in order to give MPs ‘extra time to deal with Brexit laws’.
Brexit proposals granted to the UK government include the power to make any future changes to UK laws, flexibility to accommodate trade agreements with the EU and other countries, control over the import and export of goods and the ability to end the free movement of EU citizens into the UK.
Other proposals outlined in the speech include a data protection bill designed to strengthen consumers’ rights, a national insurance contributions (NICs) bill aimed at ‘making the NIC system fairer’, and a financial guidance and claims bill, which establishes a new statutory body to co-ordinate the provision of debt, money and pension guidance.
Business groups have responded to the Queen’s Speech. Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said: ‘While Brexit isn’t the top immediate priority for many businesses, firms of every size and shape want to avoid turbulence and confusion during the Brexit transition. The government’s proposed bills on trade, customs and immigration must minimise adjustment costs and maximise opportunities.’
Meanwhile, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), commented: ‘It’s good to see commitment to special support to help British businesses export to new markets around the world, which we look forward to engaging with the government on.’