UK government ministers have met business leaders amid pressure to stay in the EU Single Market and Customs Union.
ADVERTISEMENTBritish business leaders have met government ministers amid growing calls for trading ties with Europe to be protected after Brexit.
The summit involving some 30 company bosses took place at Chevening House, a 17th century mansion in Kent, and was hosted by the Brexit secretary David Davis. It followed a warning from the EU’s chief negotiator Michel Barnier, who said the previous day that the UK’s “red lines” terms risked making “frictionless trade” – which Theresa May and other ministers have repeatedly called for – impossible.
Really positive day of discussions between biz and govt on how to make #Brexit a success. We are in a race to the top.
DExEUgov</a></p>— Helena Morrissey (MorrisseyHelena) July 7, 2017
Also on Thursday Britain’s main business organisation called for an indefinite delay in leaving the EU’s Single Market and Customs Union until a final deal was agreed. In a speech at the London School of Economics, the CBI Director-General Carolyn Fairbairn highlighted several products that benefited from current arrangements.
Among these items:
- Bread baked in Northern Ireland uses wheat from the Republic thanks to an open border and common standards covering transport and packaging.
- Harmonised rules also help sales of lipstick which can contain dozens of ingredients, while the UK can access a lucrative European cosmetics market.
- New British cars are made of parts imported from across Europe, the Single Market meaning no worries about customs checks slowing them down.
Watch this video to learn why getting a good deal from the #Brexit negotiations is so important for everyone. pic.twitter.com/hVFNz9RUEH
— The CBI (@CBItweets) July 7, 2017
Responding to the CBI’s call, on Friday UK ministers ruled out staying in the Single Market or Customs Union.
Britain’s Finance Minister Philip Hammond agreed a transitional deal should be negotiated, replicating its membership of EU structures as closely as possible.
“To people who are looking to use to protect jobs, economic growth, living standards, they won’t thank us if we deliver them an instant hit with only a longer term, slowly building benefit to compensate for it,” Hammond said.
Visiting Paris, the Trade Minister Liam Fox said there were no obstacles to replicating the current smooth trading agreements between Britain and the EU after Brexit, unless “politics got in the way of good economics”.
But he also argued that a transition period must be temporary.
“We’ve always said that we wanted to have minimal disruption and maximum continuity until we reached a final agreement and that’s perfectly reasonable that people should want to have some transitional period. But we can’t have a perpetual transitional period undermining the concept of Brexit itself,” Fox said.
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LiamFox</a>: It’s in all our interests to maintain freest possible trade between UK & EU. Speech at <a href="https://twitter.com/fbcci">fbccihttps://t.co/cnRYjrTbS7pic.twitter.com/TXxQeF4Xyh— Dept. for Int. Trade (@tradegovuk) July 7, 2017
Across the city, the Paris business district is seeking to capitalise. France is stepping up efforts to attract London banks once the UK leaves the EU, pledging on Friday to cut labour costs and rein in red tape.
The French government says it wants to scrap the highest bracket of payroll tax for firms like banks that do not pay VAT, and cancel a planned extension of tax on share trading.
There is fierce competition between Paris, Frankfurt and other European cities to attract banks based in the City of London financial centre as they consider where to shift operations to maintain access to the Euuropean Union’s Single Market.
The head of the Ile-de-France region turned the tables on former London mayor, now Foreign Secretary Boris Johnson, who once tried to attract heavily taxed French firms.
“To investors and those disappointed with Brexit I want to say that I, that we, are ready to roll out the blue, white and red carpet as London did to Paris in the past,” Valerie Pecresse said, before adding in English: “Welcome back to Europe, welcome to Paris region!”
ADVERTISEMENTAre you in finance? Come to Paris! Find out what France is doing to make Paris the #1 financial center in Europe: https://t.co/bTpxrYE8nYpic.twitter.com/Il2ReRdgVu
— Edouard Philippe (@EPhilippePM) July 7, 2017
After long feeling out in the cold following the EU referendum, UK business leaders welcome once again having the government’s ear.
Reports say the mood at Friday’s meeting was positive. However, companies are still looking for reassurance.
But the message from ministers seems to be that a long transition giving the impression Britain had not really left the EU would bring a political backlash.