Allie Renison, Head of Europe and Trade Policy at the IoD gives you a monthly update on the world of Brexit...
As we edge closer to December, the European Council summit draws nearer and the pressure is on for both negotiating sides to progress the talks. The initial Article 50 schedule had planned the trade talks to start in October, but this was delayed when the EU27 determined to meet again in December, as “sufficient progress” had not been made on phase one issues for phase two to start.
The financial settlement remains the major source of disagreement in the negotiations. While both sides agree that the UK has commitments to honour, agreeing the sum itself is proving the biggest stumbling block. Recent reports have suggested the Prime Minister has used this window prior to the December summit to secure support from senior ministers to up the UK’s divorce bill offer, in the hope that phase two can be given the green light at the end of the year.
Brexit Secretary David Davis has confirmed that Parliament will get a vote on the final Brexit deal. He had been under pressure from political opponents who had accused the Government of using the EU Withdrawal Bill as a “power grab”. Instances such as this prove just how contentious Brexit is and that, eight months after Article 50 was triggered, there is still debate on how to Brexit.
Talk of a no-deal scenario appears to have amplified of late, as politicians and businesses alike convey their frustration that time is running out. Businesses are playing the waiting game to see what the UK’s departure from the European Union means for future trading arrangements. Interestingly, the Chancellor has announced the Government is to set aside £3 billion for Brexit planning as part of the Budget.
This month I gave oral evidence to the Treasury Select Committee on the UK’s economic relationship with the EU. Speaking on behalf of our members, I explained that if we don’t have a transitional deal agreed by Q1 next year, or before the end of the financial year, businesses will have no choice but to trigger contingency plans.
The hearing coincided with the release of our latest report, which focuses on trade and business planning for Brexit. The business end of Brexit draws on IoD member surveys to see how business leaders are coping with the post-referendum economic context and what they are doing to prepare as Britain sets out to divorce its biggest trading partner. All in all, it is clear that we are reaching the limits of what can be tackled in phase one of the negotiations without discussing future relations.
As ever, do get in touch with your local, regional or devolved IoD branch to ask what activities they have regarding Europe and trade.
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