UK businesses urge Theresa May to seek three-year Brexit transition
British business leaders urged Prime Minister Theresa May to seek a three-year transitional period after Brexit, warning failure to secure more time would jeopardize "our collective prosperity."
In a letter organized by the Confederation of British Industry, executives from 120 businesses with more than one million employees again warned of a so-called cliff edge in which Britain leaves the European Union in March 2019 without a new trade deal or enough time for companies to adjust. Signatories included representatives of Centrica Plc, Zurich Insurance Group Ltd., Johnson & Johnson and Harrods.
"Our businesses need to make decisions now about investment and employment that will affect economic growth and jobs in the future," according to the letter. "Continuing uncertainty will adversely affect communities, employees, firms and our nations in the future."
While May’s Cabinet seems to have struck an agreement to push for a transition, there remains disagreement over how long it should run. Chancellor of the Exchequer Philip Hammond has sided with business in suggesting three years, while others such as Foreign Secretary Boris Johnson and Trade Secretary Liam Fox are reported to favor a shorter timeframe.
May is set to update her Brexit strategy next Friday in a speech in Florence, Italy, days after Hammond recommended a "status quo" transition.
"Until transitional arrangements can be agreed and trade discussed the risk of ‘no deal’ remains real and has to be planned for, with inevitable consequences for jobs and growth on both sides," the business leaders wrote.
EU leaders have said they are open to discussing trade and a transition, but first want to resolve differences over citizens’ rights, a financial settlement and Ireland’s border. Only after "sufficient progress" has been made on those topics are they willing to open trade talks, with doubts growing that the milestone will be reached in October as once hoped.
© 2017 Bloomberg L.P.