A majority of British businesses believe the Government’s vision for a post-Brexit relationship with the EU does not provide enough detail for them to plan and invest with certainty, a new survey has found.
The Institute of Directors (IoD), which conducted the research, also found that directors are three times more likely to view negotiations with the EU as a priority, versus signing up to new trade deals in other parts of the world.
Details emerged as Chancellor Sajid Javid laid out his vision for the UK’s trading relationship with the EU in an interview from a sandwich bar near Westminster with the Financial Times newspaper on Saturday.
It included the warning that there will not be future alignment with EU rules, although which sectors are expected to diverge has not been disclosed.
Allie Renison, head of Europe and trade policy at the IoD, said: “To give businesses any chance of being ready for the new relationship by the end of 2020, the Government needs to be as clear as possible about what its intended destination is.
“With directors clear that negotiations with the EU are the priority right now, clarity is crucial for so many companies.
“Just calling it a free trade agreement gives no indication of the balance between alignment and divergence, which is essential for firms to do any kind of advance planning. Directors need to know what the Government’s priorities for market access are for the EU.”
She added that just 35% of businesses believe the withdrawal agreement gives their organisation the “certainty needed to make planning and investment decisions”, compared with 55% who agreed they “will only be able to make planning and investment decisions with certainty when we understand our future relationship with the EU”.
Businesses have seen a boost in confidence following the Conservative Party’s election victory, with a commanding majority.
However, many continue to call on the Government for further details to allow for planning, and also urge ministers to focus on ensuring details are put above speed of delivery.
The Government said a future trading relationship will be negotiated by the end of the year, although details have not been released.
Mr Javid told the FT the focus for the Government would be “growth and productivity”, with the economy growing at between 2.7% and 2.8% a year.
However, Bank of England governor Mark Carney said he believes the growth rate will be closer to between 1% and 1.5%.
The Chancellor added in his interview that he had little sympathy for companies who are unprepared for Brexit. He said: “We’re also talking about companies that have known since 2016 that we are leaving the EU.
“Admittedly, they didn’t know the exact terms.”