Brexit: UK business groups ‘crying out for certainty’ as talks drag on
Some of Britain’s largest business groups have made a fresh plea for post-Brexit certainty from the government as the country is just 35 days away from leaving the EU completely.
The Confederation of British Industry (CBI), British Chambers of Commerce and the Federation of Small Businesses told City A.M. that their members desperately need to know what arrangements to make for next year after the UK leaves the EU’s single market and customs union.
Trade negotiations between the UK and EU are still deadlocked, with seemingly little progress made in the past several months.
The two largest barriers to a deal are future fisheries arrangements and the UK’s future state subsidy regime, which is a part of discussions over the so-called level playing field.
Talks, which are taking place virtually this week, are set to drag on into next month and will likely go down to the wire, with the Brexit transition period ending on 31 December.
Leaving the EU on no-deal terms would be a disaster for the UK’s economy, with the Office for Budget Responsibility (OBR) predicting that this scenario would knock two per cent off the UK’s GDP growth next year.
This would come after a predicted 11.3 per cent drop in GDP this year – the largest contraction in 300 years.
The uncertainty has made it difficult for British businesses that have ties with the EU to plan ahead, according to business advocacy groups.
James Sibley, head of international affairs at the Federation of Small Businesses, said UK firms were “crying out for certainty”.
“We welcome government efforts to encourage businesses to prepare for those changes that will take effect regardless of the outcome of talks, but until we know exactly what the state of play will be from 1 January, it’s extremely difficult to fully plan,” he said.
The British Chambers of Commerce (BCC) said that post-Brexit uncertainty had meant some of their firms had been losing contracts from EU clients.
The BCC’s co-executive director Hannah Essex said: “As things stand, businesses do not have all the information about what this will mean in terms of costs and processes and it is therefore difficult to be able to plan ahead with confidence.
“We’re hearing of firms losing EU customers who are also worried about additional costs and delays at the border come January.”
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Some changes are inevitable from next year, regardless of whether a UK-EU trade deal is struck or not.
Lorry drivers entering Kent will need a special permit from next year to show they have filled out the proper paperwork to cross the channel.
There will also be several lorry parks established to make border checks where necessary.
The Cabinet Office warned months ago that these new measures could lead to 7000-long lorry queues if companies are not prepared.
Last month, the Road Hauliers’ Association lashed out at the government for “creating confusion” and for not providing certainty for lorry drivers.
CBI acting director general Josh Hardie said “firms need a deal now”.
“Rolling [Brexit] deadlines are already costing companies, which have seen cash reserves disappear and stockpiles dwindle,” he said.
Brexit talks were forced to go virtual this week, after a member of the EU negotiating team tested positive for Covid.
A Number 10 spokesman today said the UK wanted to resume face to face talks if possible, but that it was “dependent on the EU”.
“You’ve seen throughout the negotiations that our intention is to try and conclude a free trade agreement as quickly as possible,” he said.