BCC reaction to the Prime Minister’s Florence speech

Viewed from the perspective of worried businesses, as well as those suffering from increasing 'Brexit fatigue', the Prime Minister’s Florence speech was a welcome effort to break the impasse in negotiations with the EU. 

Her highly-anticipated remarks delivered more clarity on business-critical issues, including both the UK’s intentions on EU citizens’ rights and a concrete proposal for a transition period.

The success or failure of this approach, however, will only be clear to business if HM Government and EU negotiators accede to our two big asks - clear transition arrangements and a start to comprehensive trade talks - by the end of 2017. 

Trade talks are the absolute priority for UK business. But, as we move closer to the start of these negotiations, I have persisting concerns about whether the machinery of the UK government is ready to deal with the mammoth task we face. 

We’re inching closer to a time where we must move beyond high-level discussions – and ensure that the nitty-gritty, practical issues that make real-world businesses tick are being addressed by those with the right expertise and knowledge. 

Over the past twelve months, I’ve been campaigning for the government to work harder on its rapport with British business and industry. 

From the immediate, complex challenge of Brexit to the knotty, sometimes decades-old domestic issues holding back UK firms, a stronger partnership between government and
business was, and remains, essential to our future economic and social success. 

It is difficult not to be pleased with the government’s visible charm offensive with business in the aftermath of the General Election. Far more ministers, and Number 10 itself, are now making visible efforts to listen to, and address, business concerns. We’re part of a number of high-level forums touching on the big strategic and political issues, with Cabinet ministers committing valuable time to engagement with a broad range of business representatives. 

Yet the true concerns of businesses are often not the exciting, high-politics elements of the Brexit process. While we heard the Prime Minister talk about EEA agreements and the Canadian relationship with the EU in her speech, these nuances aren’t on the minds of our business communities. Nor is there a vocal push for swift new free trade agreements with world powers such as the USA.

There is palpable disdain in our business communities for what is perceived as ministerial showmanship, and for our politicians’ seeming inability to resist

comments that earn them two hours' glory in the UK media at the cost of two months’ anger amongst their opposite numbers in the EU27 – notwithstanding the Prime Minister’s latest olive branch to the EU.

In many places there is a growing sense of fatigue around the aspects of Brexit that excite Westminster the most.

Yet there is plenty of interest around the direct impacts of the biggest change to the way our economy works in a generation.

Ask a businessperson for their thoughts around exchange rates, customs controls, access to workers in areas nearing full employment, or uncertainties over product standards, and the real-world frustrations become clear. 

Questions, too, bubble to the surface. We are asked about whether airlines will be able to continue to fly to key export destinations after Brexit day, which government businesses will need to pay VAT to, whether the M20 in Kent will become permanently gridlocked due to customs checks, or whether the UK has identified a regulator to work with a particular business sector instead of the current EU agency. With each passing day, these sorts of nuts-and-bolts queries increase.

Above all else, firms want a relentless focus on solving the myriad of practical and everyday questions arising as the UK prepares for its departure from the EU. But for those companies who are following the ins and outs of Brexit because of the direct threat to their competitive position, there’s a sense this isn’t happening. As one rather to-the-point businessperson said to me recently, “it’s time for them to button their lip and get stuck in to what really matters.”

When I wished for a new relationship between business and government, and a genuine partnership to make Brexit work for business and the economy, it’s the practical detail I was referring to.

Now more than ever, we need a “team UK” approach, with ministers and civil service officials leading on particular aspects of the Brexit process working systematically with individuals from business with real-world operational experience, and an understanding of how specific rules and regulations affect business viability. 

From agriculture and aviation to professional services and pharmaceuticals, it needs to get far easier to plug knowledgeable businesspeople and trade associations into the right teams across government – and work together to ensure negotiation outcomes that support our present and future economic needs.

The clock is ticking. In less than 17 months, the deadline for our formal exit from the EU will pass. While the government has now made clear its support for a transitional agreement on current terms of two years, that falls short of what most UK companies say they want and need. Technical, complex negotiations need time and resources to be done right. So over the coming weeks, we will challenge both the government and EU Commission on to provide the best possible arrangement for business to allow businesses sufficient time to plan for the practicalities of a final settlement.

In the meantime, every UK official, team, and government department needs to be reaching out to businesses and trade associations to ensure that we get the detail right, and firms the length and breadth of the country tell us they would be only too happy to help. Chambers of Commerce have been hosting officials all across the country for detailed conversations on Customs issues - just one of the many issues where business and government need to work together. 

A few months back, we wished fervently for greater government engagement with business. Now that our wish has been granted, hindsight tells me we should have wished for that engagement to be more focused, more forensic, more structured. 

Until detailed questions around hiring, borders, tax issues, regulations or data can be answered, firms may hold back on taking risks, leaving the UK less prepared to make a success of the Brexit transition. 

The Prime Minister’s speech was a welcome attempt to break the deadlock with the EU. Businesses both in the UK, and across Europe, hope it will spark constructive progress as the next round of talks begin today, allowing us to move on the vital issues of transition and trade. Westminster, but above all Whitehall, must be ready to deal with the practicalities of such a deal when the time comes. The UK’s economic success depends on it.

Dr Adam Marshall, Director General - British Chambers of Commerce

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