No deal will hurt us all, says CBI chief

Posted on 17 Jul 2018 by Maddy White

The long awaited Brexit white paper was published by the government last Thursday, and CBI general director, Carolyn Fairbairn has responded today to the plans saying a “no deal will hurt us all.”

CBI chief, Carolyn Fairbairn has responded to the Brexit white paper set out by the government - image courtesy of Depositphotos.
CBI chief, Carolyn Fairbairn has responded to the Brexit white paper set out by the government  – image courtesy of Depositphotos

Britain’s government has proposed in the document which details its post-Brexit strategy, “frictionless” trade and no routine requirements for rules of origin between the EU and UK.

This was welcomed by manufacturers and businesses who trade many of their goods (finished products, parts and sub-assemblies) and services overseas into the European market; but just how crucial are decisions being made now?

Fairbairn, general director at CBI – a company who represent more than 190,000 businesses of all sizes and sectors across the UK and employs nearly seven million people –  said that as it stands, the UK is at a “crossroads” and any commitments made now will “shape the UK for generations to come.”

Commenting on the Brexit white paper, Fairbairn said: “The clock is ticking, time is running out, and no deal will hurt us all. So it is time for all politicians on all sides to be pragmatic.”

She continued: “This is a blueprint that, behind the headlines, behind the politics, gets pretty close to the answers firms were looking for. It’s not perfect. There are gaps to fill, not least more to be done on services, which make up 80% of the UK economy.

“But the proposal for a free trade area in goods with a common rule book is exactly what businesses have asked for. It will protect supply chains across Europe. And the new customs proposals aiming for frictionless UK and EU trade may work in the longer term.”

Fairbairn said the white paper showed that the British government was “willing to compromise”, and that now, the EU should “seize” the opportunity to do the same.

Brexit white paper aims to keep trade “frictionless” by proposing:

  • Zero tariffs across goods, with no quotas
  • No routine requirements for rules of origin between the UK and EU
  • Arrangements that allow cumulation with current and future Free Trade Agreement (FTA) partners with a view to preserving existing global supply chains. This would allow EU content to count as local content in UK exports to its FTA partners for rules of origin, and UK content to count as local content in EU exports to its FTA partners.

The “common rule” book for manufacturers

Manufacturing will, according to the Brexit white paper, adhere to a “common rulebook” which the government believes will mean that British manufacturers only “need to undergo one series of tests in either market, in order to place products in both markets.”

The rulebook is to be proposed in order to reassure the UK and the EU that goods in circulation in their markets meet regulations, and in creating this rulebook it would remove the need to undertake further checks at the border.

The Manufacturer’s analysis of Brexit’s impact on industry:

Fairbairn spoke about the future of the UK economy and the aerospace and defence industries, noting: “We are in the throes of deciding what kind of economy we want to be. There are serious questions to answer. We know that.

The UK is leading exports in the aerospace, defence and space industries. - image courtesy of Depositphotos.
The UK is leading exports in the aerospace, defence and space industries.  – image courtesy of Depositphotos.

“But here’s one certainty. We want this sector [aerospace and defence industries], with its shining example of high productivity, innovation and ambition to be at the heart of our economy.”

Fairbairn spoke about the importance of Farnborough International Airshow, which runs this week from July 16-22, and is a major trade exhibition for the aerospace and defence industries and has a public airshow.

She said: “This year, Farnborough celebrates its 70th birthday. And it marks a red-letter year for the sector here in the UK. In aerospace, defence, security, and space the UK is by far the leading exporter in Europe. And is the second largest in the world.”

Mobility of people is essential

However, the document also details the restrictions on movement of people into the UK, which could be harmful to manufacturing and similar sectors, if Britain is to tackle its skills shortages.

She said: “For a truly world class industry we need a truly world class immigration system. And we will be urging the government to set out the details on this as soon as possible and in close consultation with your sector and others.”

Fairbairn also stressed on the importance of a good relationship between the EU and UK: “We must get our future relationship with the EU right. Your industries are crystal clear that we need frictionless trade with the EU, so parts can travel from Toulouse to Filton, or from Hamburg to Broughton, without delay or extra cost.”

She explained Britain and the EU need the mobility of people alongside that of goods, for example “so engineers can fly from Southampton to Sweden to fix aircraft wherever they break.”

She concluded: “Without collaboration – at scale – all parts of Europe will be weakened in the global race.