Business groups protest as PM warns UK must prepare for no trade deal with the EU

Fri 16 Oct 2020
Posted by: Noelle McElhatton
Trade News

Prime Minister Boris Johnson has told UK businesses to get ready for trading with the EU on terms “that are more like Australia’s” after trade talks reached a stand-off at the EU summit in Brussels.

European leaders had on Thursday thrown the proverbial ball back into the UK’s court, calling on it to “make the necessary moves to make an agreement”.  

TV statement

However, today (Friday 16 October) Johnson appeared on TV to lob that ball back to the EU. With talks due to continue next week, No 10 said there was “no point” in this happening unless the EU was prepared to discuss the detailed legal text of a partnership.

While observers said the PM’s remarks were an expected part of the negotiations as they near conclusion, they warned that no-deal was becoming a more likely outcome.

The Guardian quoted Neil Wilson, the chief market analyst at the financial trading platform Markets.com, as saying the PM’s remarks were “not entirely bluff”.

CBI chief Carolyn Fairbairn urged the UK government to persevere.

 “After four years of negotiations and so many hurdles crossed, this is no time to give up. Neither side can afford to fall at the final fence. A deal is the only outcome that protects Covid-hit livelihoods at a time when every job in every country counts.”

Covid warning

Mike Cherry, national chairman of the Federation of Small Businesses, said firms were not ready for a no-deal end to the transition period.

“They’re being told to both prepare and simultaneously manage a fresh set of Covid restrictions. Many simply don’t have the time or money to make adjustments, even if they want and need to,” he said.

Friday’s TV statement by the PM was a reaction to the EU deleting a call to intensify the talks from its end-of-week statement, leaving Downing Street “startled” and chief negotiator Sir David Frost “disappointed”, reports the Guardian

More talks offered

Earlier this week the EU offered a further 2-3 weeks to continue the negotiations, with chief negotiator Michel Barnier prepared to come to London next week to move talks on.

Media reported that the “atmospherics were not good” at the summit. 

While French President Macron said he was ready to accept a no-deal outcome if the UK didn’t shift its position, he hoped a “good compromise” can be reached – including on the vexed issue of fisheries. 

Mini-deals

With the deadline fast approaching, the idea of mini-deals or ‘salami tactics’ might emerge to avoid a cliff-edge scenario in areas where progress has been made. The EU has avoided this approach so far to avoid the possibility of cherry-picking by the UK.

According to a survey by the Institute of Directors, only a fifth of companies polled are fully prepared for Brexit, a survey published today has found

Allie Renison, Senior Policy Advisor at the IoD, said companies’ efforts to prepare had been hampered by dealing with COVID-19.

“Reacting to the pandemic has taken up so much of business leaders’ time and energy throughout the year. On top of this, much of the information companies need is still subject to negotiations,” she said.