Government failing to answer big Brexit questions, says BCC

The government's failure to answer the big questions about Brexit is putting business investment at risk, the British Chambers of Commerce said.

Persistent uncertainty about businesses’ main questions is causing a major slowdown in investment, the BCC said, on the same day that Prime Minister also received a letter from a group of bodies representing the law, accountancy, consultancy, architecture, surveying and advertising industries to also calling for a list of essential requirements to preserve their 4.6m services jobs amid fears the government is only focused on the flow of goods.

The BCC called on the government to stop internal squabbling and give companies clarity on trading arrangements or face a further worsening of confidence.

Following June’s European council summit there is some clarity on the position of EU nationals working in the UK and the industrial standards regime – issues that get an “amber” rating.

All the remaining 22 questions are rated “red” including:

• Whether a business will pay VAT on goods at point of import and whether services firms will have to register in every EU state where they have clients
• What rules of origin firms must comply with to receive preferential tariff rates
• Whether goods will encounter new customs procedures and delays at borders
• Whether UK regulatory checks on goods will be recognized in the EU
• How firms will be able to transfer staff between the UK and EU
• Whether UK firms will be included in EU research projects after 2020

Adam Marshall, the BCC’s director general, said businesses had given the government time in the two years since the Brexit referendum but that now was the time to speak out.

Marshall said: “With the time running out ahead of the UK’s exit from the EU, business patience is reaching breaking point. With less than nine months go to until Brexit day, we are little closer to the answers businesses need. These are the practical, real-world concerns of businesses of every size and sector, in every part of the UK.”

The BCC made its plea as the prime minister tries to get cabinet agreement on her position over future customs arrangements. Environment secretary Michael Gove reportedly tore up a copy of May’s plan and anti-EU Tory MPs have warned the prime minister not to surrender to the EU.

Meanwhile, the letter to Downing Street from the Professional and Business Services Council (PBSC), which represents more than six key sectors and claims its £66.1bn of exports make it worth more than the manufacturing, mining and extractive industries combined, set out its own list of requirements to allow these sectors to continue to serving clients and supporting the wider economy after the UK leaves the EU.

The PBSC said it needs:

• Mutual recognition of professional qualifications, products and operating licences;
• Mutual recognition of the regulatory frameworks and regulators, from data protection to audiovisual media policy laws to statutory audits;
• The ability of our service providers to fly in-fly out to facilitate advice across the EU27 and trade across Europe;
• Mutual recognition of judgments so deals across EU27 countries can proceed with legal certainty;
• Continued co-operation in areas that facilitate trade – such as data sharing;
• The ability to educate and recruit the best talent from overseas, whether from the EU or beyond; and
• Reduced uncertainty through any transition period.

"The UK can achieve these requirements by agreeing a deal with the EU that takes our needs into account," the letter read. "Failing to negotiate these elements would impair our ability to provide our services with the same range, depth and speed our clients around the world experience today, damaging their businesses and putting our sectors at a distinct competitive disadvantage."

Noting that the EU will seek to prioritise that the balance of trade in goods remains in its favour during the negotiations, the letter called for the UK to "recognise and protect" professional and other services in the final deal.

"Services enable trade and underpin manufacturing; the two are inextricably linked, not separate, as the current negotiations might suggest."