The Institute of Directors has called on the Cabinet to come to a collective decision on how to approach a transitional agreement as soon as possible.
The Chancellor has spoken of the need for interim arrangements between exit day in March 2019 and the point at which a new trading arrangement with the EU is completely finalised.
The IoD says that there are different options for transition and for businesses to be able to plan ahead, they need to know what route the Government will pursue.
In an new report, Bridging the Brexit Gap: Options for transition, the business group puts forward a range of options for a business-friendly transition to consider, outlining practical details and potential trade-offs between them.
- Prioritising an agreement to extend the Article 50 deadline – on paper this would be the simplest solution for all, giving the UK government more time to negotiate a new trading relationship with the EU as part of its withdrawal agreement, and would be the easiest to square with the World Trade Organisation. It would be a very politically challenging option, however, both for the EU and parts of the House of Commons.
- Membership of the European Economic Area – this is an off-the-shelf model, which would give the UK a degree of autonomy in implementing EU rules. It is not straightforward and tight time constraints could complicate negotiations.
- Agreement to prolong the application of EU law –cited as an option by the EU Council in its original negotiating guidelines, and could work more easily with time limitations. It is more comprehensive than other options, but likely to leave the UK with less control or input than the EEA option.
Allie Renison at the Institute of Directors, says, “There is now a window of opportunity for the Government to flesh this out as a policy objective in order to reassure companies that a smooth and orderly Brexit is on the cards. Prioritising interim arrangements and thereby mitigating the risks of EU exit means the eventual opportunities aren’t diminished by short-term chaotic cliff edges. The IoD has put forward this range of options for transition in the hopes that it sparks a proper debate on the practicalities of how best to Brexit. We look forward to engaging with both the Government and the EU on these proposals.”