techUK, CBI, EEF and International Chambers of Commerce have signed an open letter to the Prime Minister saying that UK businesses need a smooth transition to a new single market relationship when the country leaves the EU.
The letter, signed by Julian David of techUK, Carolyn Fairbairn of the CBI, Terry Scuoler of EEF, and Chris Southworth of the International Chamber of Commerce urges the Prime Minister to prioritise access to the single market, which is vital to the health of the UK economy. The letter states: “Leaving the EU without any preferential trade arrangement and defaulting to trading by standard World Trade Organisation rules would have significant costs for British exporters and importers, as well as those in their supply chains”.
techUK believes that the manner in which the UK leaves the EU will have a considerable impact on our sector and the UK economy more broadly. Issues such as data protection and negotiating a new relationship for our services sector are highly complex and agreement may take longer than the two years granted after triggering Article 50. That’s why one of our calls is for a transition period to prevent UK companies falling off a regulatory “cliff edge” when we leave the European Union. This will provide greater certainty for businesses as new regulatory and legal changes are brought in.
The Government must also set out a clear roadmap for consulting with firms of all sectors and sizes to instil confidence that these complex decisions will be evidence-based with and a genuine understanding of the economic implications.
The letter received significant coverage in the media including the FT, Guardian, Mail on Sunday, City AM and Reuters. The full text can be found below.
Dear Prime Minister,
The way in which we leave the EU and on what terms is of critical importance to jobs and investment in the UK. We respect the result of the referendum, but the Government must make sure that the terms of the deal to leave ensure stability, prosperity and improved living standards.
As business leaders we are clear what our priorities are in the upcoming negotiations.
First, the Government has committed to a bespoke arrangement. We believe this must deliver barrier free access to the EU's Single Market, which is vital to the health of the UK economy, especially to our manufacturing and service sectors. Uninterrupted access for our financial services sector is also a major priority. The sector employs thousands of people up and down the country and is critical to growth and job creation among small, medium and large British, and international businesses.
Second, leaving the EU without any preferential trade arrangement and defaulting to trading by standard World Trade Organisation rules would have significant costs for British exporters and importers, as well as those in their supply chains. 90% of UK goods trade with the EU would be subject to new tariffs. That would mean 20% in extra costs for our food and drink industry and 10% for our car producers. Every credible study that has been conducted has shown that this WTO option would do serious and lasting damage to the UK economy and those of our trading partners. The Government should give certainty to business by immediately ruling this option out under any circumstances.
Third, there is a wealth of evidence to suggest EU negotiations will not be completed within the Article 50 two-year timeframe. Many areas of regulation now up for discussion are highly complicated; whether in financial services, data protection regimes or the interconnection of energy supplies. The Government should therefore secure agreement of a transitional period, to ensure that businesses can continue to operate with no 'cliff edge' change to current circumstances until regulatory and legal changes can be implemented.
It’s vital that the on-the-ground expertise of British and international business is used to help get the best deal for the UK. The Government must set out a clear roadmap for consulting with firms of all sectors and sizes to increase confidence that these complex decisions are taken on the basis of fact and a genuine understanding of the economic implications.
The UK voted to leave the EU but not, as the Chancellor said, to cause living standards to decline. We want a Brexit that safeguards future prosperity for everyone across the UK.
Carolyn Fairbairn, CBI
Terry Scuoler, EEF
Chris Southworth, ICC
Julian David, techUK