Business has given a broad welcome to Theresa May’s new Brexit plan, although executives and lobby groups have stressed the importance of the UK making rapid progress in its negotiations with the EU.
Industrial companies that stand to benefit from Britain’s proposed UK-EU free trade area for goods expressed satisfaction with the government’s plan outlined after the cabinet supported it on Friday at Chequers, the prime minister’s country residence.
Executives in the City of London said it was helpful the government had set out its thinking, although some expressed concern that the three-page post-Chequers statement did not give much prominence to the service sector’s strategic importance.
The CBI, British Chambers of Commerce and Institute of Directors all responded positively to how the cabinet had reached an agreement on Mrs May’s Brexit plan at Chequers.
The Chequers statement appeared to address these concerns, and Roger Carr, chair of BAE Systems, the UK defence manufacturer, said: “A step in the direction of frictionless trade with the EU after Brexit will be welcomed by business.
There was concern in the City [after the Chequers deal] that the message needs to be re-emphasised that this [the UK] is a service economy
“What we need now is rapid progress in the negotiations between the government and the European Commission to give us all, on both sides of the Channel, the certainty we need to plan for a mutually prosperous future.”
While sections of the Chequers statement focused on the proposed free-trade area in goods, there were only limited references to service industries, which represent 80 per cent of the UK economy.
The document said Britain’s plan for more regulatory freedom on services would mean “the UK and EU will not have the current level of access to each other’s markets”.
It added that Britain would seek a model for financial services to “preserve the mutual benefits of integrated markets and protect financial stability”.
Mark Wilson, chief executive of Aviva, the insurance company, said: “Business craves certainty and the government’s progress and leadership this week is an important step in the right direction.”
Simon Lewis, chief executive of the Association for Financial Markets in Europe, a trade body, said “lots of expectations” were riding on getting more details from the government’s white paper, which will outline the UK’s proposals for a future relationship with the EU after Brexit, and is due to be published this week.
“There was concern in the City [after the Chequers deal] that the message needs to be re-emphasised that this [the UK] is a service economy,” he added.
The Chequers statement made no mention of the UK’s technology industry, which has been lobbying for regulatory alignment between Britain and the EU after Brexit to ensure companies can continue transferring data across borders with ease.
TechUK, the trade body, said a Brexit deal that in effect maintained membership of the EU single market for goods but not services would put the UK’s digital economy at a serious disadvantage against European competitors.
Julian David, TechUK chief executive, added: “A goods-only approach would risk UK-based tech firms selling into Europe having to comply with two competing regulatory regimes and being unable to guarantee that services can be provided on the same terms to customers in different locations.”