- Britain’s largest business group, the CBI, makes a major intervention in the Brexit debate.
- The group argues that Britain should remain a customs union with the EU “unless and until an alternative is ready and workable.”
- Theresa May’s government is currently deadlocked on the kind of trade partnership to pursue with the EU after Brexit.
- Failure to secure a beneficial partnership could lead to major economic issues for the UK.
Britain’s biggest business group, the CBI, has told Theresa May’s government to “break the Brexit logjam” or risk doing major damage to the UK economy.
In a major speech, CBI’s president, Paul Drechsler, group, will on Sunday argue that the government’s indecision over what kind of customs partnership it will pursue is crippling the UK economy.
“We need to break the Brexit logjam and fast because there’s so much more that we need to get on with,” Drechsler will say on Sunday evening, emphasising the need for “an urgent end to Brexit uncertainty.”
He will add that Britain should remain a customs union with the EU “unless and until an alternative is ready and workable” — before putting forward four tests that any future partnership should be able to pass. These are that:
- It should maintain “friction-free trade at the UK-EU border.”
- “Ensure no extra burdens are incurred behind the border.”
- Make sure there is no “border barrier” between the UK and Ireland.
- Finally, any agreement should have the ability to boost UK exports both to the EU, and to nations outside the EU.
Theresa May’s government is currently deadlocked on what kind of customs arrangements to pursue with the EU after Brexit. The prime minister has reportedly set up two working groups within her Cabinet to deal with the tricky issue of customs.
Each group has been given the task of working on one of the government’s two ideas for avoiding a hard border on the island of Ireland after Brexit: the customs partnership and the “max-fac” option.
Under the customs partnership model, Britain would collect customs union tariffs on the EU’s behalf to prevent the need for checks on goods heading for the European single market when they reach the Irish border. The “max-fac” idea seeks to minimise (but not eliminate) the friction on the border through as-yet undefined technologies.
Whichever model the UK ends up pursuing, Drechsler is expected to say that the “correct” form of Brexit would allow the UK to “transform the fabric of our economy.”
“We can revolutionise our approach to education and skills to give the next generation the best possible chance to succeed,” he will add, putting particular emphasis on the building of a third runway at Heathrow Airport.
Drechsler’s intervention comes three weeks after his organisation expressed “serious doubts” that the UK government will be able to fulfill its promise to roll-over Britain’s 40 existing free trade deals with non-EU countries in time for Brexit, and warned that failure to do so could “wipe out” entire sectors of the economy.