Speaking often of friendship and partnership, the Prime Minister's Florence address set out to move negotiations on all sides from entrenched positions, and ask for a deal that reflects the UK’s "unique relationship" with Europe in "a new era of cooperation and partnership between the UK and the EU."Ahead of the next round of talks, which get underway this week, Mrs May called “for both of us in the UK and EU to come to a new partnership," and one that moves away from a "stark and unimaginative choice between two models." Mrs May also sought to reassure EU citizens living in the UK in her speech, saying “we want you to stay” and acknowledging their role in the UK’s economy.

EU leaders' reaction to Theresa May's Florence speech

The speech received a cautious reaction from the EU chief negotiators over the weekend. Michel Barnier, the EU’s chief negotiatior, described Mrs May’s speech as a “step forward.”However, he and other EU leaders, including France’s president, Emmanuel Macron, are seeking further clarification on key issues, including exactly how the UK would honour its promise to protect the rights of EU citizens in the UK.

Business reaction to latest speech on Brexit

Here in the UK, business representatives responded to the Prime Minister’s attempt to broker a transition period, during which time the UK will continue to pay billions of euros into the EU budget. Among those commenting was Carolyn Fairbairn, director general of the business representative body the CBI. She said that while businesses have been listened to,“we now need leadership from both sides to turn the proposals and principles into decisions and action.”“Firms will welcome the proposal for a ‘status quo’ transition period for business that averts a cliff-edge exit. This mirrors exactly the CBI’s proposal made nearly 80 days ago and, if agreed by the EU, will protect jobs and investment on both sides of the Channel.“Millions of EU workers and their families in the UK need certainty and vice versa. Committing to enshrine their EU rights into UK law goes some way to doing that but until agreement is reached, individuals will still not be clear what their future holds.“Negotiators must now move the talks on to trade and transition as soon as possible. Listening to firms will help ensure agreement on a comprehensive version of what our future economic relationship with the EU will look like.”

Is a "creative" deal on Brexit possible?

Business leaders' body the Institute of Directors (IoD) also said businesses would welcome the spirit of the speech and the Prime Minister allowing time for a "creative" Brexit deal. Stephen Martin, the IoD’s director general, spoke of the importance of businesses only having to adjust once to any changes.“Businesses will be pleased that a transition or implementation period has been firmly established as government policy,” he said. “As the UK is seeking an ‘imaginative and creative’ deal from the EU, we have to be realistic that this will take some time.

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Read more Brexit coverage from Relocate Global:

• London needs ‘special deal’ to continue free movement
• Brexit: The great relocation battle
• Does HR analytics have a role in Brexit preparations?
• The head, heart and brain of Brexit: HR's role in managing uncertainty

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Call for one-off adjustment after any transition

“A lot more honesty will be needed as the Brexit negotiations continue, as any decision on immigration or regulation, for example, will have knock-on effects and businesses and the public are entitled to know what the trade-offs are," Mr Martin continued.“It is absolutely vital that businesses only have to adjust once to the new rules. The Prime Minister said that the implementation period would be time-limited, but this, like so many things, is still subject to negotiation."Acknowledging Theresa May’s challenging political balancing act, Mr Martin added: “Companies will now be hoping the government unites behind this common purpose, and hope to see significant progress in the next round of talks.”  

The skills and freedom of movement challenge

Yet for some, the proposed two-year transition will not be enough. Highlighting the impact on employers of the continued lack of clarity around freedom of movement, the British Hospitality Association's (BHA) chief executive, Ufi Ibrahim, said: “The BHA has a 10-year strategy to encourage more British workers to enter the hospitality industry and we believe this is how long our industry will need to reduce our reliance on EU workers.“There is not a readily available workforce within the UK labour market which can replace our valued EU workers given record low unemployment and an educational system that does not encourage training for recruits to our industry. “As these issues cannot be solved in three and a half years, the BHA will argue that the hospitality industry will need continued access to the EU workforce after the transition period – this transition period cannot just be a cliff-edge for migration delayed by two years.”

Tough choices and compromises in the Brexit negotations

Nevertheless, manufacturers' representative organisation, EEF, represented at the recent IRN Brexit HR event together with the IoD and the BHA, also believed May's speech on Friday was generally good news.EEF’s chief executive Terry Scuoler, said Mrs May’s speech “is a welcome step forward, which shows the government is addressing business' key requirement for a smooth transition.“We have been pressing for clarity and some common sense and the Prime Minister has responded to this in a positive manner. “A sensible transition period avoiding a cliff edge and two sets of change for companies, which maintains a stability from a business perspective, is something companies will welcome.“What business wants to see now as talks progress are positive negotiations towards a final deal that involve as much tariff free and frictionless trade between the UK and the EU as possible.”

Look out for more Brexit planning news and features in the Autumn 2017 issue of Relocate Global magazine. Download your copy here.

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