MPS must tell us more about a Brexit transition period, warns IOD
THE Government must set out a detailed vision for a Brexit “transitional” period or risk losing the confidence of business that it can successfully move towards a new relationship with the EU, the Institute of Directors (IOD) warns today.
A report from the bosses’ lobby organisation hints at rising frustration among the business community about the lack of clarity from Downing Street, warning that “soundbites are no substitute for policy” on Brexit.
In recent weeks, Cabinet ministers have opened the door to a timelimited transition arrangement for Brexit, but details of what it would entail in practice remain obscure. Theresa May is billed to make a major speech in early September clarifying Britain’s vision for its future relationship with Europe, including a possible transition, but Whitehall insiders say deep and unresolved divisions remain in the Cabinet.
Peter Lilley, a leading Eurosceptic, questioned the need for transitional arrangements at all this week in an article for The Daily Telegraph, accusing Remainers of relying on them “like drunks use a lamppost – more for support than illumination”.
However, the IOD report, entitled Bridging the Gap, argues that because negotiators will only sketch out the postbrexit relationship in “broad” terms in the EUUK withdrawal agreement, a transition period is needed to cover the gap between the two.
“Interim arrangements would therefore deal with the bridging period during which the UK and EU would negotiate the technical detail of new regulatory cooperation outlined in the withdrawal agreement’s framework for future relations,” the IOD said.
The Government, which later this month will begin publishing 10 position papers covering key areas of Brexit, has resisted providing details for fear of revealing the British negotiating stance and weakening its position in the talks.
But the IOD argues that “engaging in discussion about objectives is not tantamount to revealing our negotiating hand”, and it has urged the Government to “signal to industry and enterprise that an orderly exit is not just soundbite but an active policy objective”.
The compact 10page paper by Allie Renison, the head of EU and trade policy, lays out the spectrum of options, beginning with the extension of the Article 50 negotiation, which must be done unanimously by the EU, but would be the most comprehensive way to retain the status quo. A second avenue would be for the UK to join the European Economic Area, which would give it effective single market access, but would require an exemption on bureaucratic “rules of origin” checks.
However, with both sides indicating that these options are either politically unpalatable or too legally complex, the report explores a list of alternative measures that would effectively mirror existing arrangements and keep trade moving. These include porting over the EU’S Common Customs Code in the forthcoming Customs Bill, agreeing to maintain the Common External Tariff that ensures goods can cross EU borders freely, and acceding to the Common Transit Convention to smooth passage for hauliers.