European business groups blast UK and EU for lack of progress on Brexit services deal
A top European business group yesterday lambasted Brexit negotiators from the EU and the UK for their failure to make concrete progress towards a deal for services.
The European Services Forum (ESF), which represents firms across Europe and the UK, wrote to chief negotiators Michel Barnier and David Davis to urge them to “take all necessary actions to minimise business disruption”.
Pascal Kerneis, ESF managing director, said European businesses have grown increasingly anxious as political negotiations over the future trade relationship have failed to deliver an agreement.
“Up to now Brexit was not a major concern” for European firms, he told CityAM “Now we are starting to feel nervous because of these uncertainties.”
The services sector, including the City’s financial services and professional services such as law and accountancy, dominates the UK economy, accounting for four-fifths of annual output. The UK is currently the largest services exporter in the EU, while 11 of the UK’s top 20 services suppliers are in the EU.
Miles Celic, chief executive of TheCityUK, an ESF member, said that services trade has been neglected in the talks, which have focused mainly on goods. “This must change,” he said. “It is clear that any Brexit deal must cover both goods and services, or it will leave both the UK and the EU worse off, putting jobs and growth at risk across the continent.”
The ESF will be joined today by business groups and unions from across the EU, including the Confederation of British Industry and European umbrella organisation Business Europe, in calling for faster progress ahead of this week’s meeting of EU leaders.
The groups will call on both sides “to inject pace and urgency in the negotiations” and to make “measurable progress, in particular a backstop arrangement to avoid a hard border in Ireland”.
Rebecca Long Bailey, Labour's shadow business secretary, said: “Time is running out. Businesses, consumers and workers need certainty, not endless chaos, egos and melodrama. The government must put an end to the deadlock which is paralysing our country and our economy.”
Businesses have voiced increasing frustration in recent months as the deadline for Brexit on 29 March 2019 has edged closer with no agreement on how trade will function. The ESF noted it is “concerned” that the 21-month transition period is “unlikely to be sufficient” to reach a full trade deal.
Kerneis said: “We were trusting the politicians to take some decisions, but now we see there is still uncertainty.”
He said firms wish to preserve the most open access possible, and added that plans for mutual regulatory recognition in the financial services sector are “realistic, provided the UK gives something in exchange”.
The ESF also highlighted firms’ desire for an agreement on the recognition of professional qualifications and the need to ensure that contracts are still legally binding once the UK leaves the EU.
Contract continuity could be “tackled easily in one sentence in the trade agreement”, Kerneis said.