A Brexit fiasco will shatter confidence

THERESA May still faces an almighty challenge as she works to ensure the UK does not crash out of the EU in March 2019 with not even a transitional deal in place – but she will be delighted that EU members are going to start talking among themselves about how a future trading relationship with the UK would work.

Just days ago, EU Chief Negotiator Michel Barnier was complaining of “deadlock” in the talks process. The failure to make progress on issues as complex and vexing as the divorce bill, the future of Northern Ireland’s border, and the status of EU citizens was a source of clear concern.

But yesterday we saw some of the most senior EU figures attempt to inject optimism and momentum into the process. This may be in response to the open discussion in the UK of Britain leaving without a deal and trading on World Trade Organisation terms – a possibility that appeals to a significant slice of eurosceptics.

Alternatively, EU leaders may be responding to their own domestic pressure. Local industries will not welcome it if it becomes harder to export goods into the UK or if Britain undercuts them in key global markets.

Either way, the willingness to show flexibility and goodwill is as important as it is welcome. If the EU is seen to be obstinate and unreasonable or bullying in its determination to get a firm commitment on Brexit payments before it will talk about trade, then Mrs May will face growing calls from within her own party to abandon the negotiations and get to work preparing for a low-tax, zerotariff future.

The EU may have recognised that the new battle in Britain is not over whether the UK will really leave the EU, or if we will somehow stay in the single market, but whether the country strikes a deal with Brussels or goes off on its own ahead of the March 2019 exit.

Mrs May needs to be able to show that a strong and mutually beneficial deal is within reach, not just to dampen support for those who want a “clean Brexit” but to boost consumer and business confidence.

Our exclusive poll found just 13% of people in Wales believe they will be better off financially after Brexit.

The impact on our economy will be profound if a third of people (33%) continue to think they will be worse off, looking to the future with pessimism, fearing for the future of their jobs and abandoning hope of a pay rise.

We know what happens when confidence gets choked off. Investment grinds to a halt, positions are left unfilled when people leave, and training budgets get slashed.

This is precisely the opposite of what Wales needs. As demonstrated by position at the bottom of the earnings table, we urgently need to raise skill levels and attract wellpaying jobs – not just to raise living standards but to stand a chance of competing in the global marketplace once we leave the EU.

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