Government must show EU market access still a priority – IoD

Wednesday, 26 February 2020 00:01

Business leaders have urged the Government to be ambitious on EU market access when it publishes its negotiating mandate for EU talks later this week. In a new survey of over 900 members of the Institute of Directors, directors of small and large firms were just as likely to view continued Single Market access as important to their organisation, and respondents were even more emphatic about the wider benefits for the UK economy: Two-thirds (64%)...Request free trial

Business leaders have urged the Government to be ambitious on EU market access when it publishes its negotiating mandate for EU talks later this week.

In a new survey of over 900 members of the Institute of Directors, directors of small and large firms were just as likely to view continued Single Market access as important to their organisation, and respondents were even more emphatic about the wider benefits for the UK economy:

Two-thirds (64%) of directors say EU market access is important to their organisation, and 8 in 10 think it is important for the economy. The latter is equally true of companies that do not export.
A majority of business leaders think the UK should have some flexibility on setting different import tariffs to the EU from next year, although only 1 in 5 want to completely move away from the EU on tariffs.
Only a quarter believe there is enough time for the UK to negotiate a satisfactory new relationship, and for businesses to adjust by the end of the transition period next January.

Securing post-Brexit labour mobility was the top priority for directors surveyed as the UK heads into the negotiations, although this will be substantially different from the current free movement rules, given the Government’s new immigration policy.

Across goods and services, by nearly two to one directors favour regulatory alignment in order to deliver ease of continued market access over being able to diverge from EU rules. Views were more mixed on the approach to import tariffs, where only a third called for full alignment, while one in five thought the Government should prioritise total control and flexibility.

Allie Renison, Head of Europe and Trade Policy at the Institute of Directors, said:

“The Government has set out clear political guiding lines for the Brexit negotiations. Within these, it has to be ambitious in pursuing the space where market access can be maximized for businesses. This is not a one-size-fits-all negotiation, the benefit of regulatory alignment does vary by sector, so the Government must show that it is prepared to work with business on the detail.

“Adjustment is inevitable, but it has to be delivered in a balanced way, with cooperation on implementation to ensure any changes are sustainable. Given that uncertainty over our trading status with the EU continues to be a top concern facing directors, getting this balance right is critical to 'Global Britain' succeeding at the first hurdle.”

Full survey results

938 respondents, conducted between 31 Jan – 18 Feb 2020.

How important or unimportant is continued ease of trade access to the EU and Single Market?

For your organisation:

	Overall	Small	Medium	Large
Very important	39%	38%	44%	38%
Somewhat important	25%	25%	24%	29%
Neither important nor unimportant	18%	18%	19%	16%
Somewhat unimportant	8%	8%	6%	9%
Very unimportant	9%	10%	7%	9%
Don’t know	1%	1%	1%	0%

For the UK Economy:

	Overall	Small	Medium	Large	Non-Exporters
Very important	59%	58%	61%	56%	57%
Somewhat important	24%	22%	27%	27%	25%
Neither important nor unimportant	8%	9%	5%	6%	4%
Somewhat unimportant	3%	3%	3%	4%	5%
Very unimportant	6%	6%	4%	7%	7%
Don’t know	1%	1%	0%	0%	1%

What is your preference for the UK’s approach to EU Single Market rules on goods?

	Overall	Small	Medium	Large	Non-Exporters
Be able to diverge even if it means worse access	34%	37%	32%	24%	30%
Maintain access even if it means aligning on goods regulations	63%	59%	65%	76%	67%
Don’t know	3%	4%	3%	0%	3%

Of those who prioritise EU market access and alignment on goods, would that preference remain if it (also) meant continuing to align to EU rules in areas like employment, health/safety, environment and the competition?

Still prefer to align for market access in goods	87%
Prefer to lose EU market access in goods than align in these areas	11%
Don’t know	3%

What is your preference for the UK’s approach to EU Single Market rules on services?

	Overall	Small	Medium	Large	Non-Exporters
Be able to diverge even if it means worse access	36%	35%	37%	40%	42%
Maintain access even if it means aligning on goods regulations	61%	61%	62%	58%	57%
Don’t know	3%	3%	2%	2%	2%

Of those who prioritise EU market access and alignment on services, would that preference remain if it (also) meant continuing to align to EU rules in areas like employment, health/safety, environment and the competition?

Still prefer to align for market access in goods	91%
Prefer to lose EU market access in goods than align in these areas	7%
Don’t know	2%

What is your preference for the UK’s approach to import tariffs after Brexit?

Align UK tariffs to all EU tariffs to avoid RoO	32%
Align some UK tariffs to EU tariffs – meaning partial flexibility and avoid some RoO	34%
Don’t align any UK tariffs to EU tariffs for complete flexibility	20%
Don’t know	10%
Other	4%

What do you consider to be the most important priorities for post-Brexit negotiations with the EU?

Maintaining ease of movement of people and labour between the UK and EU	48%
Avoiding tariffs on trade between the UK and EU	42%
Avoiding non-tariff barriers for goods trade with the EU	38%
Ensuring the ability to transfer data freely between the EU and UK	26%
Being able to diverge UK import tariffs from the EU's to facilitate new trade deals with other countries	25%
Avoiding non-tariff barriers for services trade with the EU	22%
Ensuring there is an adjustment period for businesses and end users to adapt	20%
Being able to diverge from EU rules covering services	19%
Maintaining ease of access to EU research and funding streams/collaboration schemes	18%
Being able to diverge from EU rules covering goods	15%
Other	2%
Don't know	1%

Which of the following factors, if any, are having a negative impact on your organisation?

UK economic conditions	48%
Uncertain trading status with the EU	45%
Skills shortages/employee skills gaps	41%
Compliance with Government regulation	34%
Global economic conditions	34%
Business taxes	26%
Difficulty or delays obtaining payment from customers	25%
Employment taxes	24%
Broadband cost/speed/reliability	23%
Transport cost/speed/reliability	23%
Cost of energy	15%
Access to, or cost of, finance	14%
Other	4%
None of the above	2%
Don’t know/Not applicable	1%

Which of the following statements most closely fits your view?

	Overall	Small	Medium	Large
11 months is not enough time to negotiate satisfactory new relationship w/EU	44%	44%	46%	41%
11 months is enough time to negotiate new relationship w/EU but insufficient to allow for business to adapt	26%	26%	24%	25%
11 months is enough time to both negotiate new relationship w/EU and for business to adapt to it	26%	26%	26%	29%