Theresa May’s government is seeing mounting pressure from businesses, backbenchers, and the opposition over a transitional trade deal.
The UK’s five most prominent business associations are writing a letter addressed to Brexit Secretary David Davies, urging for a swift transition trade deal with the EU.
SkyNews and the Guardian have seen a draft of the letter. Employers in the UK are warning that unless a transition deal is swiftly announced there would be an impact on investment and employment. A number of companies from the financial sector have already bought office space in Dublin, Amsterdam, Paris, and Frankfurt and are planning relocation.
The warning comes as the number of companies in the UK warning of smaller than projected profits is rising to 75%, reflecting a severe slowdown in the British economy, Reuters reports. Many companies are feeling the pressure of rising costs due to the devaluation of the pound.
In her speech in Florence, Theresa May suggested a two-year transitional period in which the UK would continue to contribute to the EU budget and would have access to the Single Market.
However, that would necessitate the UK agreeing to pay long-term liabilities undertaken by the 28 member states. The UK government has not decided to assume that responsibility before a trade deal is made.
International Trade Secretary, Liam Fox, told the BBC on Sunday that the UK does not intend to come to a final agreement over the sum it plans to pay before there is a clear picture of the future trade relations with the EU.
In a letter to the Sunday Times, the Labour Shadow Brexit Secretary Sir Keir Starmer presented the government with an ultimatum. Either the government will accept six amendments to the so-called repeal bill or the Labour Party will back Tory backbenchers in their demand for parliamentary approval of the final Brexit deal.
The amendments include demands for workers’ and consumer rights guarantees, as well as environmental standards. Moreover, the government must devolve some of the executive competencies held by Brussels to devolved administrations in Scotland, Wales, and Northern Ireland.