Manufacturers & entrepreneurs urge Govt to secure strong deal with EU

Dear Prime Minister,

Today marks the point of no return for needing to agree an EU trade deal and prepare the country for that by the end of this year. That focuses the mind, and we assume that is your hope, to put pressure on such a deal being found.

It is however also a huge gamble. With the Coronavirus pandemic having created an enormous economic shock across the UK and around the world. With just six months to go, to the end of the Brexit transition period in December, a no-deal outcome would be hugely damaging to the UK economy. Resulting in more people out of work and lower living standards.

The government’s own analysis suggests that the downside of a no-deal exit, compared to continuing with our current arrangements, would be approximately 8% of GDP in 15 years’ time – perhaps more.

We are now witnessing increasing global trade tensions, and a sharp focus on localising of supply chains, that will make promised trade with the USA, China and others more difficult. This will make even the most optimistic upside from global trade of 0.7% of GDP in 15 years less likely.

To minimise the downsides, it is vital that the UK achieves the best possible trading arrangements with the EU and other countries. We are calling for these trading arrangements to uphold the common high standards currently applicable on both sides in the areas of state aid, social and employment standards, environment, climate change and tax.

Continued alignment with the key EU regulatory bodies that allow free flow of products in such areas as pharmaceutical, medical, and chemical supplies is also essential to keep non-tariff barriers to a minimum. The UK’s financial services businesses also urgently need assurance of an equivalence agreement with the EU that is broader than the traditional arrangements and gives them much greater certainty.

In addition, businesses simply do not have time or capacity to prepare for big changes in trading rules by the end of the year – especially given that we are already grappling with the upheaval caused by Coronavirus. Securing deals that match the current arrangements as closely as possible is therefore even more essential to make those adjustments easier.

We are therefore calling on you to ensure full transparency over the substance of these negotiations and these deals, to enable proper assessment of the potential economic consequences and through that assure us that the economic downside on our businesses can be minimised.

If, despite the warnings from business and others, the government pushes ahead with no-deal or a bad deal at the end this year, it will create a further economic shock and cost people’s jobs, which we desperately want to avoid, especially at this point when our businesses need to be focused on recovering from the Coronavirus crisis.

Yours sincerely,

Signed by 110 small to medium-sized businesses, entrepreneurs and business associations with significant experience of trading with the EU. We are all proud to create significant value for the UK economy and our interest is to continue doing so.