Business groups voice reservations over Brexit plan
There was a mixed reaction from leading UK business groups to the government's Brexit proposals, published in a White Paper hailed as the Brexit blueprint.
12 July 2018Find the full report on the government's Brexit White Paper here.
The Institute of Directors (IoD) welcomed the thrust of the government’s plan for a free trade agreement but said ministers had “missed a trick” by failing to provide detail in areas such as a post-Brexit migration policy, VAT arrangements and dispute resolution.
Mixed feelings among businesses and lobby groups
Meanwhile, TheCityUK lobby group described it as “regrettable and frustrating” for financial and related professional services firms that a post-Brexit system of mutual recognition was not being pursued by the government.The Confederation of British Industry (CBI) generally welcomed the direction of the proposals but also pointed out more detail was needed for some in the services sectors, for the planned new customs system and for VAT within the EU.Concerns over future VAT arrangements and fears that time was short to negotiate a comprehensive agreement with the EU were also expressed by the British Chambers of Commerce (BCC).Here is what leaders of some prominent business organisations had to say:Stephen Martin, director-general of the IoD – “This White Paper puts some vital meat on the bones of the Chequers plan. More specifics on its proposed customs arrangements and its proposed free trade area in goods with the EU will be welcomed by business leaders who have delayed Brexit preparations because of a lack of detail on the future partnership.“However, the government has missed a trick by holding back on detail in several areas. Clarity about its approach to VAT arrangements, which are crucial to achieving its aim of frictionless trade with the EU, is in short supply.“The paper also implies that businesses and individuals won’t have access to any new dispute resolution mechanism relating to enforcement of the agreement. Given the unprecedentedly close economic arrangement the UK is hoping for with the EU as a third country, this should be in there.“But the biggest question mark looms over what will replace freedom of movement. The government is right to prioritise an ambitious scheme on labour mobility with the EU, but businesses need to work from concrete proposals. We would urge the government to bring forward its plans for post-Brexit migration, which should be at the heart of our future economic partnership with Europe.”Related stories:
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Miles Celic, CEO of TheCityUK – “The overriding issue for financial and related professional services firms is the ability to continue serving customers and clients. Mutual recognition would have been the best way to achieve this. It’s therefore regrettable and frustrating that this approach has been dropped before even making it to the negotiating table.“In hundreds of discussions across the EU, the industry has never come across an unanswerable technical or commercial barrier to this approach. The EU’s objections have always been political.“Our priority now is to examine the proposals in the White Paper and engage with government on how this new approach can be made to work in the interests of our customers. We are reassured that the government continues to reject the current form of equivalence. It does not meet any of the requirements for success.“Brexit was always going to result in access to the EU market being more difficult. Therefore, an effective and secure future regulatory relationship is vital. It is now urgent that we make rapid progress on the negotiations, both around the future relationship and on immediate issues for customers such as contract continuity.”
Offering direction to Brexit negotiations
Carolyn Fairbairn, CBI director-general – “The Brexit White Paper reflects much of the evidence that business has been highlighting since the referendum. This direction is welcome: protecting jobs and investment now and in future should be the guiding star for both sets of negotiators.“Many of the intentions are reassuring. Seeking a free trade area for goods and a common rule book shows the Prime Minister has put pragmatism before politics and should be applauded.“Businesses on both sides have been asking for frictionless trade between the UK and EU, and shared rules could go a long way towards delivering that. It is now the EU’s turn to put economics before ideology on these proposals.“The UK’s world-beating services industry, representing around 80 per cent of our economy, will be pleased by moves to maintain free-flowing data, mutual recognition of qualifications and mobility for skilled workers across the EU. This is the right ambition that makes sense for both sides.“But there are gaps in these proposals and more detail is needed on EU VAT, some services sectors and the new customs system. It will be a make or break summer. It’s vitally important UK negotiators get their heads down and work with businesses to grapple with the detail and get it right.“With three months left to go, it is now a race against time. The EU must now engage constructively and flexibly, as must politicians from all UK parties. This is a matter of national interest. There’s not a day to lose.”Adam Marshall, director-general of the BCC – “At last, businesses have a more comprehensive understanding of the Government’s aspirations for the UK’s future relationship with the European Union. “This vision should not have taken two years and three weeks to emerge, but it is nevertheless a welcome starting point for businesses.“Momentum and pace are now needed to translate ambition into answers to the real-world, practical questions that businesses face. Even with the welcome direction of travel in the White Paper, companies still don’t know how they’ll be paying VAT, how they can move people between offices, or whether goods will get across borders with a minimum of fuss. It is incumbent on the two sides to work pragmatically and productively on the nuts-and-bolts detail of the future relationship over the coming weeks, drawing on business experience and expertise. “Time is short – and for businesses, it’s results that count.”The Permits Foundation recently published its Brexit Survey Report – a survey of employers on the impact of Brexit on EU citizen employees in the UK and their family members – which our readers may find helpful.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.
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