Walking away from Brexit negotiations would be “an act of gross irresponsibility”, putting jobs at risk, while EU-UK data flows, which underpin both economies, also need to be addressed urgently. These are some of the warning voices coming from British industry associations.
Britain's corporate and banking sector is “close to their point-of-no-return” a UK business lobby group warned this week, after it became clear that Theresa May's government still doesn't have a clear strategy for Brexit. The warning was reported by Bloomberg, quoting a speech due to be given by the Confederation of British Industry (CBI) president Paul Drechsler. In his speech he is to say: “Every day, companies are having to plan for the worst while hoping for the best. They are making choices that will determine new jobs, new plants and new investments in the years ahead. Businesses will press snooze for as long as they can – but the alarm will go off.”
'Act of gross irresponsibility to walk away'
This warning came after Brexit negotiations stalled this week over the border between the Republic of Ireland and Northern Ireland, with the DUP vetoing the idea of Northern Ireland being the only part of the UK to remain in the Single Market and the Customs Union. Following that, the British government's department for leaving the European Union (DexEU) also faced embarrassment as Brexit minister David Davis told a parliamentary committee that his department has not carried out detailed sectoral analysis of the impact of Brexit (contradicting his previous claim that in-depth research had been done for 58 sectors).
A survey by the CBI suggests that about one in 10 companies have started preparing for a 'no-deal scenario' on Brexit, a proportion that will rise to six out of 10 by March 2018. However, Drechsler had stern words those who are urging the prime minister to walk away from negotiations in favour of a 'no-deal' Brexit. He said this would almost certainly mean job losses in British industry: “We can’t enter into negotiations that affect the future of millions of people and then leave at the first sign of trouble. It would be an act of gross irresponsibility to walk away.”
Urgent call to protect EU-UK data flows
UK Finance, the association for the financial, banking and payments industry, also called for rapid action to protect flows of data between the EU and UK post Brexit. A joint report commissioned by UK Finance and TechUK said mutual agreements on the treatment of data exchanged between the UK and the EU, plus a transition period, would be needed to preserve the strong working relationships already in place and offer businesses much-needed regulatory certainty.
UK Finance stated: “When the UK leaves the EU in March 2019, it will lose the automatic legal framework for the free flow of personal data. Unless a new arrangement is agreed, transfers of personal data across Europe will be severely limited – requiring alternative mechanisms which can be costly or complex – or stop, potentially at huge financial cost for both economies. It is in the interests of both the UK and EU27 to act on this issue as soon as possible.”
Time is of the essence
TechUK's CEO, Julian David, said: “We are a data-driven economy and our success is underpinned by our ability to move that data cross-border. With the Brexit deadline growing ever closer, time is of the essence. The UK and EU must recognise each other’s data protection frameworks as adequate as soon as possible. This should be a priority for Phase Two of Brexit negotiations. This isn’t solely for the benefit of one industry or one country but for the whole European economy as cross-border data flows become ever more important for trade and the ability to do businesses.”
CTMfile take: The state of Brexit negotiations at the current moment is bewildering. As a corporate treasurer, CFO or other financial professional, how are you now planning your operations post March 2019? How would you like to see the UK-EU negotiations conclude and what scenario would be the best deal for your company?
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