Responding to the Chancellor’s Mansion House
Speech this morning, Allie Renison, Head of EU and Trade
Policy at the Institute of Directors, said:
“Business leaders will welcome the pragmatic approach taken when
talking about Brexit in his Mansion House speech. There were no
big surprises, but the focus on jobs and the economy is a step
towards shoring up shaky business confidence. The Chancellor
reiterated the Government’s intention to leave the EU Customs
Union, which always seemed likely in the long-term, but crucially
showed some flexibility on pushing for an orderly process to do
so. The emphasis on the need for an early agreement on
transitional provisions – as opposed to sorting this out toward
the end of the negotiations – is positive. Firms will need to
know, at the latest by next summer, whether there will be
substantive changes to trade and migration arrangements in order
to have time to activate any contingency plans.
“The challenge now is to convince the EU that these arrangements
are as important as the final deal, and to work with business to
develop what those should be. Replicating the EU’s Common
External Tariff and remaining in the European Economic Area on a
transitional basis should be actively considered, given the
constraints of the Article 50 timeline. It is clear the Treasury,
working with the Bank of England, has been considering how to
approach regulatory cooperation with the EU on financial services
for the final trade agreement, though it must be stressed this is
not a short-term exercise. It is important for the Government to
continue stressing that this isn’t just about UK access to the EU
markets but also preserving financial stability across all of
Europe.
“The IoD strongly urges Government look early on at domestic
measures to boost business confidence which don’t need to wait
for bilateral negotiations, such as creating a simplified system
for a permanent route to residency for EEA nationals. We want
business to be prepared for all scenarios but the Government
should be approaching negotiations with the aim of trying to
ensure that firms do not feel they need to pull the trigger on
contingency planning before it is absolutely necessary. This is
all the more important if leaving the EU involves significant
relocation activity and cash and capital stockpiling that will
hit business investment.”
