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Financial Times: UK business leaders trade blows over Brexit

Date: 07 12 2016

UK business leaders trade blows over Brexit

Campaign head says leaving EU will provide opportunity to cut 10 per cent of rules

Business leaders have traded blows over EU regulations with Carolyn Fairbairn, head of the CBI, dismissing “silly examples” put forward by Eurosceptics to justify Brexit.

John Longworth, co-chair of “Leave Means Leave”, told MPs on Wednesday that he believed leaving the EU would provide an opportunity to cut “10 per cent” of regulations, reducing costs for businesses.

Mr Longworth, a former director-general of the British Chambers of Commerce, told the Brexit select committee that truck drivers were “angry” that they could not do more overtime because of regulations. He also cited a manufacturer of smoked salmon who was told that his tins had to include the label “may include fish”.

But Carolyn Fairbairn, director-general of the CBI, replied: “We have to be careful not to pick silly examples . . . We need to have a proper consideration of the costs and benefits.”

Ms Fairbairn said that the regulations governing commercial drivers were “invented by the UK” and the Road Haulage Association backed them.

She said that many CBI members had “large concerns” about the divergence of labelling post-Brexit because it was already one of their largest costs.

But Mr Longworth said larger companies tended to back the EU because it was easier for them to negotiate their way around Brussels. “Deregulation is often top of the list for small business,” he said.

One MP privately said that Mr Longworth, who now represents a campaign group rather than a business membership group, had been invited to talk to the committee because it had been hard for the committee to find organisations prepared to argue for the business benefits of leaving the EU.

Frances O’Grady, head of the TUC, meanwhile warned that cutting regulation could have negative consequences for working people.

Ms Fairbairn said the CBI — which argued against leaving the EU — was now “in the business of getting the best from Brexit”.

She said the group had five main demands from the Brexit process, including barrier-free access to the single market, access to “skills and talent”, regulatory equivalence, the best possible trade deals around the world and the protection of economic and social benefits.

Asked specifically about the consequences of leaving the customs union, she said there were “pros and cons”.

She said some members had voiced the view that leaving the union would allow Britain to “conduct our own trade arrangements” with partners.

But she added: “There are concerns about the red tape, bureaucracy, customs barriers and rules.”

“For some sectors it is almost as great an issue as tariffs.”

The issue of the customs union came up repeatedly at prime minister’s questions with Emily Thornberry, shadow foreign secretary, pressing the government over whether the UK will stay inside it. “It would be a disaster for Britain if we do not remain part of the customs union,” she told the Commons.

She reminded MPs that David Lidington, leader of the House — standing in for Theresa May — had warned before the Brexit vote that leaving the customs union would be damaging to business. Mr Lidington said events had changed since the public had voted for Brexit in June.

Ms Fairbairn repeated the CBI’s warning that the “cliff edge” — Britain leaving the single market without new arrangements — was the biggest concern for the organisation’s members.

Mr Longworth said that people should “stop worrying about” how quickly a Brexit settlement would be reached, and “stop obsessing about” access to the single EU market.

He said progress would be made on concluding trade arrangements with other countries outside the EU during the exit negotiation period so that the UK would have “signature-ready” deals on “day Brexit plus one”.

“No deal is better than a bad deal,” he said.

Ms Fairbairn disagreed and said that CBI members were urging government to “get on with it, and get it right”.

“We would like to see barrier-free entry to the single market,” she said. “Our members are very concerned about the ‘just leave’ approach. Speed matters, but not without a plan.” All three business and union representatives argued that EU workers should be given the right to remain in the UK.

“This right should be given unilaterally and should not be used as a bargaining chip in negotiations,” said Ms Fairbairn.

At a private meeting on Monday with Theresa May, business groups unsuccessfully pressed the prime minister for more details on which European workers would be allowed to stay in the UK after Brexit.

December 7th, 2016: Financial Times