Brexit: UK business community and trade bodies welcome progress on EU transition deal

Trade bodies and industry leaders had specifically raised concerns around the movement of goods and people across borders after Brexit

Trade bodies and business groups have broadly welcomed what’s being dubbed a decisive step in Brexit negotiations that has led to an agreement over the terms of a transition period after the UK formerly leaves the trading bloc next year.

The EU on Monday said that it would permit Britain to sign its own trade deals during the transition phase, meaning that little is likely to change in terms of trading between Britain and the EU at least until the end of 2020.

EU chief negotiator Michel Barnier described the agreement as a “decisive step” towards an overall deal on an orderly withdrawal and the pound rose sharply against the dollar on the news, implying that investors were relieved.

Adam Marshall, director general of the British Chambers of Commerce, hailed it as a “milestone agreement” and said that, although some companies would have liked to see “copper-bottomed legal guarantees around the transition”, the progress is “sufficient for most businesses to plan ahead with a greater degree of confidence”.

“Many companies will now have the clarity they require to proceed with investment and hiring strategies that would otherwise have remained in question,” he added.

The Confederation of British Industry has been a vocal critic of the Government’s handling on Brexit negotiations so far, but on Monday director-general Carolyn Fairbairn also said that the agreement “brings a welcome gift of time for firms on both sides”.

She said that the deal was “a victory for common sense that will help protect living standards, jobs and growth”.

“Other hurdles on the Brexit path now need to be cleared in the same spirit,” she added.

And Allie Renison, head of Europe and trade policy at the Institute of Directors, applauded the news too.

“Business leaders will welcome the announcement of a provisional agreement on an implementation period and congratulate the UK government for heeding the call of business and making it a priority early on,” she said.

Many trade bodies and industry leaders had specifically raised concerns around the lack of clarity relating to possible cost increases and the free movement of people across borders after Brexit.

Experts have predicted that sectors like retail and manufacturing would likely be hit particularly hard by the introduction of additional levies and restrictions on European workers’ rights in the UK.

Federation of Small Businesses chairman Mike Cherry said that after Monday’s announcement, the small business community will particularly be relieved to be protected “from a damaging cliff-edge moment”.

“It’s encouraging to see so much of the withdrawal agreement green lit. We look forward to seeing some more certainty around the shape of final Brexit terms,” he said.

But others warned that more work still has to be done.

“We are already half way through the Article 50 process, but we are yet to reach a half-way point in addressing the vital issues faced by customers across Europe,” said Miles Celic, chief executive of TheCityUK, an industry body representing UK-based financial and related professional services firms.

Scores of internationally-focused banks based in London have already said that they plan to relocate some staff to ensure that they can continue providing their services to all clients seamlessly after March 2013.

Mr Celic said that negotiators should seize on the latest progress and use it to press on towards “agreeing an ambitious vision for the future. One which builds on our close trading partnership in goods and services and strengthens European growth and financial stability”.

Ms Renison of the IoD also said that her organisation is concerned that the Government is still not giving enough attention to the finer details and practical implications of transition.

“Many businesses will only be able to sufficiently plan and prepare for Brexit once the precise details of the future relationship are known, and any changes to domestic infrastructure like customs have been implemented,” she said.

Stephen Phipson, chief executive of EEF, the trade body for the manufacturing industry, also cautioned that “the clock is still ticking”.

Both sides still need to “deliver a meaningful and comprehensive agreement on a future relationship”, he said.

“This is essential to deliver the operational certainty needed by UK manufacturers to trade effectively, access the necessary talent from the EU and provide the vital investment the economy needs.”