You are here: Home » International » News » Politics
Business Standard

Tell us how Brexit will work, British companies ask Theresa May

Theresa May vowed in a speech last month to seek a two-year transition deal to help reduce the disruption

Reuters 

Brexit

British including pharmaceuticals giant AstraZeneca urged the government on Monday to agree a three-year transitional deal to ease the uncertainty hampering investment decisions and the economy.

Britain's biggest have become increasingly alarmed by the slow progress of negotiations and the prospect the country could crash out of the world's biggest trading bloc without a deal in 2019.

Prime Minister vowed in a speech last month to seek a two-year transition deal to help reduce the disruption, but her efforts were overshadowed by a challenge from Foreign Secretary Boris Johnson who has set out his own terms for Britain leaving the

Johnson, a leading campaigner, said a transition period should not last a second more than two years. He also said Britain should not accept new EU or rulings during transition, must not make payments for single market access when the transition ends, and should not agree to shadow EU regulations to gain access.

AstraZeneca Chairman Leif Johansson said the reality was that a company like his, with 60,000 employees around the world, needed at least three years to prepare for Brexit, and more guidance beyond that.

"It should be at least three years," he told the Swedish daily Dagens Nyheter. "And very early in that period, we need to know what to expect in years four, five and six."

Adam Marshall, the director general of the British Chambers of Commerce which represents employing 5 million people, also called for a three-year transition, and went further, saying the infighting at the heart of government had undermined confidence in the country.

"Businesspeople across Britain are growing impatient with division and disorganisation at the heart of the party of government," he said in a statement. "Public disagreements between cabinet ministers in recent weeks have only served to undermine business confidence."

Britain's shock 2016 vote to leave the EU stunned many businesses, with the prospect of border delays and tariffs threatening to fracture intricate supply chains that have built up across the continent over the last 40 years.

Supporters of leaving the EU admit there may be a short-term hit to the economy but say that ultimately Britain will prosper because will break the shackles that have clamped it to a decaying German-dominated experiment in European integration.

The world's fifth-biggest economy grew at its slowest pace since 2013 in the 12 months after the referendum and have warned they will struggle to invest until they have a clearer idea of how Britain will trade in the future.

While many businesses welcome a transitional period, they warn it does not help if they do not know what they are transitioning to.

Showing how little room the government has to manoeuvre, the trade body that represents Britain's powerful finance sector, CityUK, said any transition deal should be used to hammer out a deal that allows Britain to set its own future and not take rules from Brussels.

"We stress that we need a transitional period in order to reach a decent deal in the long term," it said. "We cannot be in a situation where the UK is a rule-taker, that is not appropriate either for this industry or for this country."

Finance minister Philip Hammond acknowledged the divisions within the cabinet and said uncertainty over was weighing on the economy. But he said he was working to remove the "cloud of uncertainty" and that he was fighting for a good deal.

"There are short-term challenges and the uncertainty created by the negotiation process is one of them," he told BBC radio from the Conservative Party's annual conference.

"The sooner we can get some clarity, the sooner we can move forward, give businesses and investors more certainty about the future, the quicker this economy will start growing again."

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, October 02 2017. 19:37 IST
RECOMMENDED FOR YOU