The Daily Telegraph

Business threat to derail Brexit

City leaders demand indefinite delay in Britain’s departure from Single Market and Customs Union

- By Steven Swinford and Christophe­r Williams

DAVID DAVIS will be confronted today by business leaders demanding an indefinite delay in Britain’s departure from the Single Market and the Customs Union.

The Brexit Secretary has invited some of Britain’s most senior executives to his grace-and-favour residence at Chevening in Kent for an informal summit.

In a major escalation of the business community’s attempt to soften Brexit, the CBI group last night called on the Government to reach an open-ended “transition­al deal” with the European Union to protect businesses.

Mr Davis and other senior Tory Euroscepti­c MPS have said that they expect Britain to leave the Single Market after Brexit negotiatio­ns end in March 2019.

However, Carolyn Fairbairn, the director-general of the CBI, yesterday warned that it will be “impossible” to reach a final deal by then.

She urged the Government to build a “bridge to the future” by agreeing a transition­al deal as soon as possible that will retain membership of the Single Market and Customs Union until a Brexit deal comes into force.

This would mean that Britain would have to accept free movement of EU citizens and the oversight of the European Court of Justice for an unspecifie­d transition period.

It would also prevent the UK from negotiatin­g new trade deals with countries outside the EU. Ms Fairbairn said: “This is a time to be realistic. Instead of a cliff edge, the UK needs a bridge to the new EU deal. Even with the greatest possible goodwill on both sides, it’s impossible to imagine the detail will be clear by the end of March 2019.”

The CBI’S position – strengthen­ed by recent figures suggesting the economy is slowing – appears to reflect that of Philip Hammond, the Chancellor, who has repeatedly said that Britain needs to agree a transition­al deal to avoid a “cliff-edge” Brexit.

It will raise fears that with no time limit applied to the transition deal, Britain may never effectivel­y leave the EU, leading to accusation­s the group is trying to derail by stealth Britain’s decision to leave the EU. Mr Davis has previously stated that he expects Britain to leave both the Single Market and the Customs Union by the end of the decade.

Business leaders privately believe that Theresa May’s failure to secure an outright majority at the general election will give them significan­tly more influence over Brexit.

Labour last night announced that it is backing the CBI’S demands, placing more pressure on the Prime Minister. The approach is likely to provoke significan­t splits in Conservati­ve ranks. Change Britain, a pro-brexit pressure group

previously endorsed by Boris Johnson, said last night: “Committing to stay in the EU’S Single Market and Customs Union during a transition period would only serve to tie our hands during negotiatio­ns, and make it more likely that the EU gives us a bad deal.”

The guestlist at Chevening is understood to include Xavier Rolet, the chief executive of the London Stock Exchange, Carolyn Mccall, the chief executive of Easyjet, Dave Lewis, the head of Tesco and Gavin Patterson of BT. The CBI, Institute of Directors and manufactur­ers’ organisati­on EEF will also attend.

The group’s demands came as Michel Barnier, the EU’S chief Brexit negotiator, accused British politician­s of failing to understand that the UK cannot leave the Single Market and Customs Union without losing out. He also warned that Britain has “more to lose” than the EU if it walks away from negotiatio­ns without a deal. Mr Barnier will meet Jeremy Corbyn, the Labour leader, next week. Downing Street said the Government did understand the EU’S position and was focused on “getting a deal that works for both sides”.

“It isn’t new that some on the EU side have strong feelings about the decision the British people took last year but the UK Government is focused on getting the best possible deal for our whole country and a deep and special partnershi­p that’s in the interests of the whole continent,” said the PM’S official spokesman.

Lord Hague, the former Foreign Secretary, yesterday warned that Brexit will damage “undoubtedl­y” Britain’s ability to influence world events.

He said: “Brexit will be damaging to our ability to work with other EU countries, obviously on foreign affairs and influence their outlook overall.”

“There is no doubt we are a big player in the foreign affairs council, bigger than we are in the financial and economic affairs of the EU. It is also true that they will want to consult us, to temper the gloom a little bit.”

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