UK should stay in single market until Brexit deal in place - CBI

The Confederation of British Industry has called on Theresa May’s government to keep the UK in the EU single market until a Brexit deal has come into force.

Britain’s negotiating team is currently in discussions with its European counterparts to discuss the exit deal following last year’s referendum.

May has said that the UK will most likely relinquish access to the single market and customs union, but the CBI said on Thursday that should not happen until the new deal is in place.

In a speech at the London School of Economics on Thursday, the CBI’s director general Carolyn Fairbairn said it was ‘impossible’ for all the details of Brexit to be worked out by March 2019.

Fairbairn said: “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.

“Our proposal is for the UK to seek to stay in the single market and a customs union until a final deal is in force. This would create a bridge to the new trading arrangement that, for businesses, feels like the road they are on.”

TRANSITION

The lobby group represents businesses in the UK, and Fairbairn added that the feedback received from firms so far indicates a transitioned Brexit would be the best option.

“Firms tell us this feels like common-sense. But if others have alternatives that deliver equivalent economic benefits, now is the time to put them on the table.

“The goal should be a framework for the new trading relationship before we exit in March 2019. A ‘heads of agreement’, to use the language of business, in writing, that will allow technical talks to start.”

The CBI director general added that Brexit posed several risks to investment in the long-term.

“The prospect of multiple cliff edges – in tariffs, red tape and regulation - is already casting a long shadow over business decisions. The result is a ‘drip drip’ of investment decisions deferred or lost.

“A major European engineering and electronics firm has told us it has shelved plans to build a UK innovation centre.”