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Business leaders call for clarity on post-Brexit trade talks

UK business leaders have urged Boris Johnson to spell out his plans for post-Brexit trade talks with the European Union.

A new poll for the Institute of Directors (IoD) found that just 35 per cent of firms believe the existing Withdrawal Agreement between the UK and the EU gives them the “certainty needed to make planning and investment decisions”.

Meanwhile a majority of businesses – 55 per cent – said they would “only be able to make planning and investment decisions with certainty when we understand our future relationship with the EU”.

The findings come after Chancellor Sajid Javid angered some business groups by warning companies that there will be no alignment with the EU after Brexit – and calling on firms to instead “adjust” to new regulations.

He told the Financial Times: “There will not be alignment, we will not be a rule taker, we will not be in the single market and we will not be in the customs union – and we will do this by the end of the year.

“There will be an impact on businesses one way or the other, some will benefit, some won’t.”

But Allie Renison, head of Europe and trade policy at the IoD, said: “To give businesses any chance of being ready for the new relationship by the end of 2020, the Government needs to be as clear as possible about what its intended destination is.

“With directors clear that negotiations with the EU are the priority right now, clarity is crucial for so many companies.

“Just calling it a free trade agreement gives no indication of the balance between alignment and divergence, which is essential for firms to do any kind of advance planning. Directors need to know what the Government’s priorities for market access are for the EU.”

More than 60 per cent of the 952 company directors surveyed by the IoD meanwhile said striking a post-Brexit deal with the EU was “more important” to their company than agreeing a pact with the United States.

Just a fifth (20 per cent) said a deal with the US and other countries outside of the EU was “important” to their firm.

The Times reported on Tuesday that Johnson will attempt to increase his influence in trade talks by publishing plans for parallel discussions with the EU and the US in the coming weeks.

According to the paper, the Prime Minister will deliver a speech and publish a series of documents after Britain leaves the EU on 31 January setting out Britain’s formal negotiating mandate for both sets of talks.

A third batch of papers will meanwhile outline plans for agreements with other countries.

Under the terms of the current Withdrawal Agreement, the UK will enter a transition period after it leaves on 31 January, during which time it will stay broadly aligned with EU rules and standards.

Johnson has vowed not to extend that period beyond the end of this year.

Number 10 said: “We are free to begin discussions with countries around the world from February 1. We are ready to begin discussions with the EU from February 1.

“The EU have various processes to go through before they are ready to sit down and have those discussions with us. The EU have agreed formally to complete this process by December 2020, that is what we would expect to be achieved.”

The European Commission, meanwhile, will not sit down to agree its negotiation demands until 25 February.

Spokesman Eric Mamer said: “This, we know, will take some time, which is why we have said we will start negotiations as quickly as we can, but it will certainly not be before the end of February, beginning of March.

“This is not a slowing down or speeding up of the process.

“This is simply the nature of the institutional process and the consultations that need to take place before the negotiation directives can be formally adopted.”

By Matt Honeycombe-Foster

Source: HOLYROOD

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Company directors’ optimism in UK economy plunges on Brexit fears

BUSINESS leaders’ confidence in the UK economy has tumbled to its lowest for more than 18 months as Brexit fears dominate, a poll by the Institute of Directors reveals.

The poll of 724 company directors, conducted between December 5 and 20 and published today, shows business leaders in all nations and regions of the UK are pessimistic over the economic outlook on a 12-month view.

The IoD noted that its confidence tracker showed overall optimism about the economy had recovered to be in positive territory briefly earlier this year, boosted by the initial agreement of a Brexit transition period. But the IoD flagged the fact that business leaders’ optimism over the UK economy had fallen steadily since April.

Tej Parikh, senior economist at the IoD, said: “Business leaders are looking ahead to the new year with trepidation about the economy. While we saw cautious optimism emerging when the Brexit talks appeared to be moving towards a transition period after March 2019, that has utterly dissipated now. There can be no doubt that the tumultuous Brexit process is having a damaging impact on firms’ outlooks. The prospect of a no-deal in the near future will be weighing heavily on directors’ minds.”

He added: “Politicians must not forget that every day of Brexit confusion is a day we aren’t focused on the long term. Leaving the EU has consumed the political agenda since the referendum, deflecting attention from critical challenges we face, including boosting growth across the UK and addressing widening skills gaps.”

The IoD noted investment would likely remain subdued. It flagged its finding that, subtracting the proportion expecting to cut investment from that planning to increase capital expenditure, only a net seven per cent of business leaders anticipate a rise.

Mr Parikh said: “Uncertainty is already causing businesses to delay investment, hiring decisions and product launches, which also acts to weaken our international competitiveness further down the line. The longer this state of affairs continues, the more we lose by it, even if these effects aren’t apparent in the here and now.”

The IoD observed business leaders nevertheless remained relatively upbeat about the prospects for their own firms.

Source: Herald Scotland