Mixed Reaction from Industry Following Brexit Speech Confirming UK Will Leave the Single Market

18 Jan 2017 --- Theresa May’s Brexit plan speech yesterday, (January 17) where she stated Britain must leave the single market while pledging to get the freest possible trade deal for the UK, has caused mixed reactions from industry. The Prime Minister outlined government priorities for negotiations with the European Union, claiming that it is impossible for the UK to remain in the Single Market as this would mean “not leaving the EU at all.”

“We are leaving the European Union, but we are not leaving Europe,” May said. “And that is why we seek a new independent partnership between a self governing global Britain and our friends and allies in the EU.”

“Not partial membership of the European Union, associate membership of the European Union or anything that leaves us half in half out. We do not seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave. No. The United Kingdom is leaving the European Union and my job is to get the right deal for Britain as we do.”

She also warned the EU not to punish Britain for leaving and said the government will put the final deal which is agreed between the UK and the EU to a vote in both Houses of Parliament before it comes into force.

Negotiations are likely to start after notice under Article 50 of the Lisbon Treaty is served in March.

Reacting to May’s speech, Food and Drink Federation director general Ian Wright welcomed the clarity on the Government's approach to plans for the UK's EU exit.

“The food and drink industry is worth £108 billion to the UK economy. Two thirds of food and drink exports go the EU. So we welcome the Prime Minister's commitment to securing the freest and simplest possible trade arrangements with the EU. We are also encouraged that the PM hopes to adopt a phased approach to Brexit which offers businesses time to prepare and plan as opposed to a potentially fatal jump from the cliff edge.”

“In addition to its huge economic contribution the food and drink industry is at the heart of our national security and our national infrastructure. It must be a top priority in any consideration of sectoral deals with the EU.”

“We understand the Prime Minister's wish to control immigration and attract the brightest and best global talent. Our industry also needs access to workers with a range of skills - some not widely available in the UK - so we welcome the assurances for current EU workers and look forward to understanding better how her proposals will impact on future access to skilled and semi-skilled workers from the EU.”

In contrast the National Farmers’ Union has issued a statement that says it has “legitimate and important” concerns about the UK leaving the Single Market.

“The Prime Minister has ruled out the UK’s continuing participation in the European Single Market or the EU Customs Union and instead has stated her intention to pursue a free trade agreement with the EU. We hope the Prime Minister’s ambition can be achieved, but as we know these kind of deals normally take years to conclude and do not cover all products,” it says.

“If a quick and comprehensive deal cannot be achieved it would be absolutely vital that there are appropriate phased arrangements to avoid a disruptive cliff-edge to allow Britain’s farmers to adapt – especially given that farming is a long term industry where farmers are making decisions now without knowing what a future trading environment will look like.”

“The British farming sector, along with many other industries, has consistently warned of the dangers of putting up barriers to accessing the European Market whether financial or logistical.”

The NFU is also seeking urgent talks with the government as to how a post-Brexit Britain could work for Britain’s food production and for detailed commitments on a suitable transition period.

And the NFU Scotland’s Parliamentary Officer Clare Slipper said that the speech wasn’t a ‘Blueprint for Brexit’ – with detail integral to the negotiations still being kept under wraps - but was the Prime Minister’s clearest public statement since the Brexit vote.

“Will the future trade arrangements allow Scottish producers the best possible access to EU markets, and could this be in the form of a ‘special deal’ as has been suggested for the automotive and financial services industries? With freedom of movement clearly still presenting a sticking point, will we retain and secure access to a competent and reliable workforce? And will the negotiation allow the appropriate agricultural policy to be developed in the UK that provides appropriate funding levels and flexibility in policy-making that recognizes Scotland’s unique agricultural systems.”

Meanwhile British Retail Consortium chief executive Helen Dickinson, says it’s “crucial” that the UK gets a new deal that works for British consumers, without leaving them with high import tariffs at a time when the Pound is already weak.

“The Government has an opportunity to secure a win-win deal that works for the UK economy, by keeping prices down for consumers, while allowing the EU to continue benefiting from its open-trade relationship with the UK,” she says.

“This deal will take time to agree. The proposed ‘phased introduction’ must at all costs avoid the cliff-edge scenario - a sudden and overnight change in trading conditions that won’t benefit anyone. The number one priority for an orderly exit should be to allow all goods traded between the EU and the UK to be in free circulation.”

“Transferring responsibility for regulation from the EU to the UK will be a complicated task, taking up enormous resource. The focus should be ensuring the smooth transition from EU to UK law. Substantive reform will have to wait until we have left the EU.”

In the agricultural industry, there are concerns about how new trade deals outside of the EU will impact on the fresh produce sector. British Growers chief executive, Jack Ward, comments in Farmers’ Weekly about the “world of difference” between exporting fresh produce to the Continent and transporting it to places like Australia, New Zealand and the US.

“The devil will be in the detail – at the moment we’re leading with headlines,” he said.

Meanwhile Adam Marshall, Director General of the British Chambers of Commerce (BCC) says UK business now have a clearer sense of the Prime Minister’s top priorities. “The simple fact is that businesses all across the UK are carrying on. Directly-affected companies are being pragmatic, and are preparing for a range of possible outcomes.”

“Away from Westminster, many businesses are ignoring the Brexit 'noise' completely, and say there needs to be a far bigger focus on getting the basics right here at home. Their message is that Brexit must not become all-consuming, and that having the right skills, infrastructure and business environment across the UK will play a far bigger part in our future success than any eventual Brexit deal,” he says.

Talking specifically about the Single Market, he added: “Many businesses facing immediate post-Brexit impacts have been preparing for the eventuality that the UK would leave both the Single Market and the Customs Union, with some sort of free trade deal to follow. The Prime Minister's remarks largely confirm this, and will lead other firms to think about making similar plans.”

“Clarity on barrier-free arrangements between Northern Ireland and the Republic remain critical to business.”

by Gaynor Selby

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