Business leaders applaud Brexit transition deal

Business groups in the UK have been buoyed following the provisional agreement between the EU and UK, in which both parties agreed to citizens’ residential rights and a transitional process.

Business leaders applaud Brexit deal
The UK’s biggest business groups have welcomed the Brexit agreement reached in Brussels that allows for a ‘status quo’ transition period that will last until the end of 2020.

EU citizens in UK breathe sigh of relief

There was also relief that workers arriving from the continent during the transition period will now enjoy the same residential rights as the three million-plus EU citizens already living and working in Britain.

Irish border questions continue

However, there remained concerns over the lack of agreement over the future of trade and travel arrangements at the Irish border and business leaders said it was now imperative for progress to be made on a comprehensive, post-2020 trade deal between the UK and EU. Carolyn Fairbairn, director-general of the Confederation of British Industry, said, “Agreeing transition is a critical milestone that will provide many hundreds of businesses with the confidence to put their contingency planning on hold and keep investing in the UK.“This is what businesses have been calling for since last summer. It brings a welcome gift of time for firms on both sides. While some sectors may need more than 20 months to prepare for post-Brexit life, this is a victory for common sense that will help protect living standards, jobs and growth. It shows what can be achieved when people and prosperity are placed above politics and ideology.“With a year to go, this breakthrough must set the pattern for the future. Other hurdles on the Brexit path now need to be cleared in the same spirit, including urgent resolution of the Irish border.“A year ago both sides ruled out an early transition deal; today both sides have agreed one. The voice of prosperity and evidence from the business community is being heard. This spirit of compromise must be maintained, as tough choices lie ahead on the route to a final deal.”

UK businesses hail progress but look to next step

Adam Marshall, director-general of the British Chambers of Commerce, described the Brussels agreement as “a milestone that many businesses across the UK have been waiting for” but said the priority must now be to agree on future trading arrangements.He added, “The agreement of a status quo transition period is great news for trading firms on both sides of the Channel, as it means that they will face little or no change in day-to-day business in the short term.“While some companies would have liked to see copper-bottomed legal guarantees around the transition, the political agreement reached in Brussels 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.“In the interests of business across Europe, both sides must now do everything in their power to ensure that the transition does not become a political football later in the negotiation process.“Businesses across the UK will be particularly relieved that they will be able to hire and retain European nationals on similar terms over the next two years, given the significant skills gaps they continue to contend with.”
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Investment disruption expected to be alleviated

Allie Renison, head of Europe & trade policy at the Institute of Directors, said, “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.“Knowing that trade and immigration arrangements will continue unchanged until at least the end of 2020 will allow business operations and investment decisions to carry on without unnecessary disruption for the time being.“We are, however, concerned that not enough attention is being given now 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.“(Brexit Secretary) David Davis is therefore right to say we must progress immediately on to substantive trade negotiations without further delay. With that said, both sides should commit now to a finite adjustment period once a new trade agreement has been finalised, as is the case for most trade deals.” 

UK and EU regulation continuity

Stephen Phipson, chief executive of the manufacturers’ organisation EEF, added, “Industry has long called for transition arrangements to ensure manufacturers can plan with sufficient confidence and certainty as the UK leaves the EU.“The time period to the end of 2020 is short but must be used by both sides to maximise negotiations to ensure the final arrangements continue to support jobs, investment and growth in the UK and EU.“It is also a welcome step that the transition period will be based on the UK adhering to the current technical regulatory environment used across the EU which is vital for ensuring continuity for UK and EU wide supply chains.“The clock is still ticking, however, for both sides to deliver a meaningful and comprehensive agreement on a future relationship. 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.” 
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