Theresa May: New relationship with EU will take time to finalise

Businesses asked the prime minister for certainty on Brexit. She couldn’t give it to them.

In his opening address, Confederation of Business Industry (CBI) president Paul Drechsler called for a “single, clear strategy” on Brexit. Instead, he said what we were getting reminded him of a “prime-time soap opera with a different episode each week.” Drechsler warned that 10% of businesses had already started moving operations from the UK or slowing recruitment as a result of Brexit. And he added that if a transition deal couldn’t be secured by March, that 10% would become 60%.

For 10% of business the alarm has already rung, and they’ve begun moving staff or slowing recruitment.

Without a transitional deal, when EU leaders gather in Brussels for the March summit, a total of 60% of businesses will have done the same. The clock is ticking.

Paul Drechsler, CBI president

It’s fair to say that business would like some certainty on Brexit. Unfortunately, it doesn’t seem to be something the prime minister is able to deliver. Speaking after Drechsler, the prime minister said she had been “determined to give business and industry as much certainty as possible”. She noted this was the first priority set out in her Lancaster House speech on Brexit in January.

Theresa May then reiterated her position that she wanted “an ambitious economic partnership” with the EU. And that this would be with the UK out of the single market. However, she isn’t able to say what this new “partnership” would actually look like. At her Florence speech, the prime minister could only say that it would not look like single market membership like Norway has. Nor would it look like the free trade deal the EU has with Canada.

May also told business leaders: “We should be excited by the possibilities which this new relationship presents for the future, just as we are realistic in acknowledging that it will take time to finalise.”

We should be excited by the possibilities which this new relationship presents for the future, just as we are realistic in acknowledging that it will take time to finalise.

Theresa May, prime minister

This is curious because both the prime minister and the Brexit secretary David Davis have told parliament that a new relationship with the EU should be agreed by the time the UK leaves the EU in March 2019. Indeed, they also said that any agreed transition arrangements would not be implemented if a new deal was not agreed by the UK’s withdrawal. So even if a transition deal was secured by March 2018, if a new relationship deal isn’t agreed by March 2019, there will be no transition. Any certainty given by securing a transition deal earlier has been taken away and it’s the prime minister who’s taken it away. This position also seems in contrast to her comments today that a new relationship “will take time to finalise.”

Government putting transition at risk with deadline to agree final deal

Meanwhile, the EU’s chief Brexit negotiator Michel Barnier sees things a little differently. As the Guardian reports, Barnier said that outside of the single market, the new UK-EU deal would most likely look like the Canada-EU deal.

From the moment the UK told us that it wants out of the single market and the customs union, we will have to work on a model that is closer to the agreement signed with Canada.

The single market is a set of rules and standards and is a shared jurisdiction. Its integrity is non-negotiable, as is the autonomy of decisions of the 27. Either you’re in or you’re out.

Michel Barnier, EU’s chief Brexit negotiator

He also said that even this could take “several years” to negotiate. However, Barnier noted that a transition deal agreed beforehand would “leave us more time to prepare for the future relationship.”

Image: © EU2017EE Estonian Presidency/Flickr
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