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.”