May seeks to soothe ‘cliff-edge’ Brexit fears

The Myanmar Times - - International Business -

PRIME Min­is­ter Theresa May sought to re­as­sure busi­ness lead­ers ner­vous about the “cliff-edge sce­nario” of Bri­tain leav­ing the EU as she an­nounced a sig­nif­i­cant boost in re­search in­vest­ment.

Ms May made the an­nounce­ment at the Con­fed­er­a­tion of Bri­tish In­dus­try (CBI) an­nual con­fer­ence on Novem­ber 21, shortly af­ter in­dus­try lead­ers warned her about the im­pact of an abrupt de­par­ture from the EU and its cus­toms union.

“Busi­nesses are in­evitably con­sid­er­ing the cliff-edge sce­nario – a sud­den and overnight trans­for­ma­tion in trad­ing con­di­tions,” Paul Drech­sler, CBI pres­i­dent, said.

“If this hap­pens, firms could find them­selves stranded in a reg­u­la­tory no man’s land.”

In com­ments in­ter­preted as re­fer­ring to a pos­si­ble tran­si­tional ar­range­ment with Brus­sels, Ms May said, “We don’t want a cliff-edge”.

“Busi­nesses want to know with some cer­tainty how things are go­ing to go for­ward. That will be part of the work we do in terms of the ne­go­ti­a­tion,” she said.

But com­pa­nies at the gath­er­ing voiced their con­cerns.

“I’m not too op­ti­mistic about Brexit,” a rep­re­sen­ta­tive from Ger­man en­gi­neer­ing firm Bosch told AFP, speak­ing on con­di­tion of anonymity. “I don’t see things moving in the right di­rec­tion”.

Some busi­ness lead­ers have called for a tem­po­rary deal to set the terms of trade be­tween Bri­tain and the EU if a full deal can­not be reached in the two-year win­dow avail­able to ar­range Bri­tain’s di­vorce from the bloc.

“It’s re­ally about mak­ing sure that we have a tran­si­tion in term of reg­u­la­tory regime,” Rain New­tonSmith, CBI chief econ­o­mist, said.

The prime min­is­ter has so far re­fused to out­line what she will de­mand from EU lead­ers, but promised to up­date busi­ness on plans.

“If we ap­proach the dif­fi­cult ne­go­ti­a­tions to come in the right way, with the right spirit, we can strike a deal that’s right for Bri­tain and right for the rest of Europe too.”

One of her govern­ment’s top pri­or­i­ties would be to se­cure an “early agree­ment” on the sta­tus of Bri­tish na­tion­als in Europe and EU na­tion­als in Bri­tain.

The con­tin­ued avail­abil­ity of a Euro­pean work­force is a key con­cern for Bri­tish busi­nesses.

Ms May spooked some in­dus­try lead­ers last month when she slammed “dys­func­tional” mar­kets and warned tax-avoid­ing multi­na­tion­als she was “com­ing af­ter” them dur­ing her first speech as leader.

How­ever, she struck a softer tone at the con­fer­ence, say­ing her govern­ment “will al­ways be­lieve” in free mar­kets, cap­i­tal­ism and busi­ness but in­sisted they needed to serve the in­ter­ests of ev­ery­one.

The Bri­tish econ­omy has re­mained re­silient in the face of post-ref­er­en­dum un­cer­tainty, but fi­nance min­is­ter Philip Ham­mond is ex­pected to an­nounce a down­grade in fu­ture growth prospects when he presents the govern­ment’s first ma­jor post-Brexit fi­nan­cial state­ment to­day. –

Photo: AFP

CBI Pres­i­dent Paul Drech­sler says busi­nesses are con­cerned.

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