Brexit a done deal - now to get deals done

The UK's oft-delayed departure from the European Union at 23.00 GMT on Friday was greeted with joy by some, grief by others and an uncomfortable air of uncertainty among British businesses.

David Sapsted

31 January 2020

In fact, of course, nothing changed in practical terms on Friday. That will only happen when the transition period ends, probably on December 31 this year, though even that might have to be extended if the two sides cannot reach a comprehensive trade agreement in the next 11 months.And it is the unknown shape of that agreement - not to mention the unknown shape of immigration rules that will come into effect then - that is causing so much discomfort in the UK's boardrooms.The Institute of Directors (IoD) is calling on the government to publish its negotiating objectives for the trade talks and recently published a survey showing the majority of its members did not believe the Brexit withdrawal agreement provided enough certainty to unlock business investment."Despite overall confidence numbers improving substantially in this post-election survey," said the IoD, "55 percent of respondents said they could only make planning and investment decisions with certainty once they understood what the UK’s future relationship with the EU would look like, compared with 35 per cent who felt the current withdrawal deal gave enough certainty."The poll also showed that a large majority of directors regarded reaching a trade deal with he EU as far more important that sealing trade agreements with other nations around the world.Publishing negotiating objectives, said the IoD, would help to mitigate the uncertainty facing businesses, allowing them to try to prepare for the changes that may come at the end of the year.Allie Renison, the IoD's head of Europe and trade policy, said: “To put in place their investments, many of our members need to work from a clearer framework on our post-Brexit relationship with the EU. The withdrawal agreement provides clarity for the next 12 months and no further – enough for some organisations but not for those trying to take long-term decisions.“To give businesses any chance of being ready for the new relationship by the end of 2020, the government needs to be as clear as possible about what its intended destination is. With directors clear that negotiations with the EU are the priority right now, clarity is crucial for so many companies."Just calling it a free trade agreement gives no indication of the balance between alignment and divergence, which is essential for firms to do any kind of advance planning. Directors need to know what the government’s priorities for market access are for the EU.“The implications of the withdrawal agreement could be profound for internal UK goods trade between Great Britain and Northern Ireland, and they rest largely on this next phase of talks with the EU. Particularly for firms that rely on trade across the Irish Sea, there simply must be an adjustment period once the new deal is struck.”Commenting on Friday on the UK’s departure from the EU, Dame Carolyn Fairbairn, director-general of the Confederation of British Industry (CBI), said: “Today the UK leaves the EU, but our future prosperity remains connected.“Despite the challenges of the last three years, together we have made progress. No deal has been avoided and a year of status quo gives time to shape that new relationship.“Now the real work begins. It’s time to focus on the future and build a new relationship with Europe. This can reflect our shared values and mutual interest, and support bold global trade ambitions.”Adam Marshall, director-general of the British Chambers of Commerce (BCC), described the Brexit date as "just the end of the beginning, not the beginning of the end". He said that decisions made during the next phase of negotiations would influence the business environment for decades to come."Businesses are likely to face significant changes in the way they trade, both in Europe and across the world. The government must clearly communicate what those changes will be – and provide timely guidance and support to help firms adapt and make the most of new opportunities as Britain sets its own trading policies," he added“Our business communities are pragmatic and want to move on from the emotional arguments around Brexit that have stymied confidence and investment for so long. They want to work with ministers to get the details right on issues like customs, regulation and immigration – and they are desperate to avoid more of the cliff-edges that have affected their operations in recent years.“On the domestic front, spades in the ground for new infrastructure, better skills and training, and action to lower the up-front costs facing UK businesses are urgently needed to boost confidence and unlock investment.”