Business leaders ramp up campaign for soft Brexit

Business leaders today ramped up their campaign for the UK government to take a soft approach to Brexit. They want the UK to remain inside both the EU´s single market and customs union during a transitional phase.

With the government appearing fragile following last month´s general election, business leaders were using a meeting with Brexit Secretary David Davis to hammer home their arguments for a soft Brexit.

CBI pressure

Ahead of the meeting, the CBI adopted its most voracious argument since last year´s Brexit vote, calling for the UK to stay inside both the EU single market and customs union. It wants the UK to remain a member of both mechanisms until there is at least a fully comprehensive trade agreement in force.

The CBI claims that the UK is already suffering from the impact of cancelled or delayed business decisions as Brexit-related uncertainty continues.

“Instead of a cliff edge, the UK needs a bridge to the new EU deal. Even with the greatest possible goodwill on both sides, it’s impossible to imagine the detail will be clear by the end of March 2019. This is a time to be realistic,” said Carolyn Fairbairn, CBI Director-General.

With mounting scepticism that the UK will be able to agree a trade deal by the time Brexit negotiations end in March 2019, the CBI is effectively calling for the UK to make a transitional agreement with the EU beyond March 2019.  

It wants such a deal to preserve the exact same rights that UK businesses currently exercise in trading with EU member states.

Davis meeting

Brexit Secretary David Davis was today hosting a number of senior UK business leaders at his ceremonial country estate in Kent. Many of those attending were set to argue for a soft Brexit.

Along with leaders from pro-single market firms such as EasyJet, Tesco and BT, Davis was also set to face representatives from the CBI and manufacturers organisation EEF. The latter is also lobbying aggressively for a soft Brexit.

Repeal Bill

Just as the pressure was building on the government from business leaders, Labour Shadow Secretary Sir Keir Starmer said it was “highly likely” that Labour would seek to oppose the Repeal Bill, the legislation that seeks to build a legal foundation for the UK to leave the EU.

The bill is intended to upend the 1972 European Communities Act, which gives EU law supremacy over UK law. Should parliament vote against the bill, it´s possible that the UK´s plans to leave the EU could be derailed.

However, in order to defeat the bill, Labour would need the support of rebel Conservative MPs, who are prepared to vote against their own government.

May intervention

Earlier in the day, Prime Minister Theresa May tried to strike a friendlier tone with the UK´s pro-EU business leaders.

May told Sky news: "We can't be members of every part of the customs union but we want to continue to have tariff-free and as frictionless trade across borders as possible because we want to ensure we have that good trading relationships with the EU."

With the government still striving for only some sort of partial customs union membership, let alone single market membership, it appears a long way from appeasing business groups such as the CBI.

To take the CBI´s line, however, the government would likely need to continue abiding by the EU´s freedom of movement principal, at least during the term of any transitional phase.

May is opposed to such an approach because she believes that the UK effectively voted for rules to control immigration from EU member states in last year´s referendum.