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Allie's Brexit blog: December update

20 Dec 2017

While December marks a winding down for most, it was a significant milestone in the Article 50 process - and not short of drama at that.

The Prime Minister’s initial attempt to broker a UK-EU deal was thwarted by the DUP, after it objected to a clause in the text that would see Northern Ireland maintain “regulatory alignment” with the EU. In the end the party agreed to a change in wording that promised “no new regulatory barriers” between Northern Ireland and the rest of the UK in the absence of agreed solutions. Subsequently, the EU27 decided that ‘sufficient progress’ had been made on phase one.

These developments are crucial for two reasons. Firstly, they make clear the Prime Minister must not only grapple to negotiate with the EU27, but she is also facing challenges from her government at home. Secondly -  and more significant for businesses - May ultimately made it over the line and UK firms are breathing a sigh of relief that discussion can shortly move on to transition and future trading arrangements. The IoD and other business groups have issued a joint statement on the breakthrough.

Many are feeling a renewed sense of optimism in the talks that has not been seen since May’s Florence speech in September. But while business leaders welcome the progress made, we need to be realistic that things will only get more difficult from here unless some key questions are answered. Our Director General has penned an open letter to the Prime Minister flagging 12 questions for the government as we enter the next phase. These include queries that are basic but fundamental for the business community, ranging from customs processes to transition arrangements to work permits.

The European Commission has recommended draft negotiating directives for the next stage of talks, which include a transition period that does not last beyond 31 December 2020. It is worth noting that IoD members would like a minimum of 12 months to adjust to new trading arrangements once they are known or agreed.

All in all, we anticipate that 2018 will involve some serious soul-searching from government as we try to get to the core of what Brexit will mean for UK businesses. In this regard, we expect government-to-business engagement to ramp up in the new year.

Recently I paid a visit to the IoD’s Northern Ireland branch to discuss Brexit. I have also undertaken various media engagements, including appearing on Newsnight, the Today programme and BBC Radio 5 live. I wrote a piece for the Telegraph which explained that Brexit is forcing UK politicians to pay more attention to the idiosyncrasies of trade policy, and argued that trade agreements nowadays are as much about standard setting as they are about trade liberalisation.  

Please don’t hesitate to make contact with your local, regional or devolved IoD branch to enquire about any Europe and trade activities coming up. From my side, I would like to highlight our next Brexit webinar on 25 January, which will look at what the negotiations so have told us so far about immigration and citizens’ rights. The registration page will shortly appear on our webinar homepage

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