May must act now on customs plans or harm jobs and business, says CBI leader
THERESA MAY will cause a “major setback” to British business if she does not urgently make a decision on Britain’s future customs plans, the head of the UK’S largest business lobby group is warning.
Carolyn Fairbairn, the directorgeneral of the CBI, accused the government of pursuing “ideology over evidence” with its plan to leave the EU customs union after Brexit, risking thousands of jobs and business in the process. Warning of “huge frustration” growing in the business community over the impasse in government, she said ministers now had only days to act.
“Ideology is winning out over evidence,” she said in an exclusive interview with The Daily Telegraph.
“Based on current technology, both the options that the government is considering will create new barriers to trade with Europe and that will inevitably harm jobs,” she said.
Her intervention came as rival teams of cabinet ministers spent the weekend debating the two customs options put forward by government – both of which Ms Fairbairn said were currently unworkable.
“The CBI’S view… is that there is a non-ideological and practical solution that is staring us in the face: that we stay in a Customs Union with the EU unless and until there is an alternative that is workable.”
The CBI says that it speaks for some 200,000 businesses and represents 140 trade associations that employ seven million people, or one-third of the UK’S private-sector workforce.
Ms Fairbairn, who has angered ministers in the past with her attacks on the customs union policy, said her organisation was not trying to stop Brexit, but feared that the Government risked squandering the momentum won last March when it secured a 21-month transition deal from the EU.
“The impact of the March transition deal was really positive. It unlocked investment decisions, and caused companies that had their fingers hovering over their Brexit contingency-plan buttons to lift them off. But if we don’t break the impasse on this customs decision, everybody will be affected – manufacturers, services companies, retailers. An awful
‘If we don’t break the impasse on this customs decision within weeks, days, everyone will be affected’
lot hangs on this now. We need decisions within days and weeks.”
UK officials fear that if Mrs May cannot find a workable consensus between hard and soft Brexiteers ahead of the June 28-29 European Council, the EU may shut-off talks about the future trading relationship, or even rescind the offer of transition.
Ministers are currently debating between a “new customs partnership” in which the UK would collect tariffs on Eu-bound goods on Europe’s behalf, or a “maximum facilitation” option that would use technology to minimise disruptions.
Brexiteers have rejected the former as “crazy” and a betrayal of the Brexit promise to take back control of money, borders and trade; while the remainers say the latter will necessitate a goods border down the Irish Sea and hit businesses with painful costs and delays.
Ms Fairbairn said that the Cabinet was debating a “false choice” – arguing that the Brexiteers were wrong to say that it was necessary to quit the customs union in order for the UK to boost its global trade footprint.
Pointing to studies which showed that Free Trade Agreements would only cause a minimal two per cent uplift in UK trade, Ms Fairbairn said the UK should instead concentrate on other trade-boosting measures, such as export finance provision, trade promotion in UK embassies and increasing airport capacity.
“There is so much that can be done within existing arrangements we have – just look at Germany’s trade with China which is five times the UK’S within the same EU framework. The biggest thing increasing China-uk trade in recent years is the number of flights from UK airports to Chinese cities,” she added.
Leaving the customs union, she added, would impose huge frictions on the 2.6 million trucks that move through Dover every year.
Some 43 per cent of UK exports go to the EU, with 150,000 UK companies, many of them small businesses, only exporting to Europe.
She added that the spectacle of British politics at a total impasse was causing global reputational damage to the UK.
“This is about moving ahead with Brexit – about how we get on with it – but in a pragmatic way that protects jobs.”