Focus on transitional arrangements of Brexit, urges IoD

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Philip Hammond, mentioned in IoD column on transitional arrangements of brexit

Both negotiating teams have their sights on the end goal. Yet concentrating on the transitional arrangements – with the priorities of business at their heart – would make the process far more manageable, argues Allie Renison

There is no mistaking the difference between a gobstopper and a marshmallow: your teeth would crack on the first, but sink right into the second. Unfortunately, Brexit is no confection. For all the recent talk of hard and soft versions, the reality isn’t that simple.

Much was made in the media of the softer tone of the chancellor’s recent Mansion House speech, but the ultimate destination remains the same. Philip Hammond made it clear that, in the long run, the UK would no longer be a member of the single market or the EU’s customs union.

That outcome is one thing; the path to reach it is another – and the government does seem to be listening more to business about the importance of the transitional arrangements. Our message, not only to our own policy-makers but also to Brussels, is this: get the transition right, and everything else becomes much more manageable.

This could mean a range of things – for instance, replicating the EU’s common external tariff once out of the customs union (until a new customs arrangement is in force); joining the European Economic Area to maintain our current level of access to the single market; or prolonging the application of the EU treaties for an interim period.

The challenge is to strike an early agreement on such matters, but both sides seem squarely focused on the final outcome.

There has been some progress in addressing the status of the three million non-British EU citizens in the UK, with the government recently making its proposals.

The IoD welcomed the intent, but expressed concern at the complexity that many people will face in adapting to the new settled-status categories to which the government intends to move them.

I say “categories” rather than “category” because, while the plan aims to convert and replicate people’s existing entitlements, it differentiates based on the time that individuals have spent in the UK.

Those who have been abroad for extended periods – on work secondments, for example – may face a fight to prove their eligibility, while the cut-off date for applications is likely to become a political football.

The hard work really starts now, as business fights to ensure that it’s kept engaged and informed as proposals turn into negotiations and the rhetoric meets the nitty-gritty.

The timing of the general election, which put civil servants into purdah – meaning that they couldn’t publish any proposals for the negotiations – already leaves the UK playing catch-up.

The election result and the consequent political uncertainty have undeniably jangled nerves among companies, with IoD members reporting a plunge in confidence in June.

On a more positive note, there has been a real uptick in engagement between government and business on the subject of Brexit. The secretary of state for business, Greg Clark, and the secretary of state for exiting the EU, David Davis, have formed a business advisory group to provide input and feedback during the negotiations. The IoD will be there to represent its members.

Throughout the process, the institute will be available for the government to call on to gauge the business priorities for Brexit. We remain focused not only on ensuring that we influence the nation’s direction and speed of travel out of the EU, but also on helping our members to prepare for every possible outcome.

Allie Renison is the IoD’s head of Europe and trade policy

@AllieRenison

Read more on transitional arrangements of Brexit

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About author

Allie Renison

Allie Renison

Allie Renison leads on trade and EU policy at the IoD, devising recommendations and representing the voice of members on EU reform matters and helping to provide the link between business and government on increasing international trade. She also routinely provides advocacy for the IoD on a range of regulatory issues in Brussels.

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