Business lobby groups call for agreement on Brexit transition deal “as soon as possible”

Do you agree with this reader when it comes to Brexit, in that no deal is better than a bad deal? (P

Do you agree with this reader when it comes to Brexit, in that no deal is better than a bad deal? (Picture: PA) - Credit: PA

Business leaders are calling for a Brexit transition deal to be agreed 'as soon as possible' as firms are preparing to make 'serious decisions' with consequences for jobs and investment.

Five of Britain's biggest business lobby groups have also called for the transitional period to match current trading arrangements with the EU as closely as possible, in a draft letter intended for Brexit secretary David Davis.

Theresa May has requested a time-limited transition of around two years with the UK and EU trading on broadly similar terms to now and payments to Brussels to fulfil already agreed budget commitments.

But although EU leaders agreed at the summit to begin scoping work on a future relationship, they made clear to the prime minister she must make more concessions on a divorce payment to unlock talks on trade and a transition.

The private letter, which is believed not to have been sent yet, was reportedly signed by the CBI, British Chambers of Commerce, manufacturing trade body EEF, the Institute of Directors and the Federation of Small Businesses.

The letter, originally obtained by Sky News, said: 'Agreement [on a transition] is needed as soon as possible, as companies are preparing to make serious decisions at the start of 2018, which will have consequences for jobs and investment in the UK.

'And the details of any transitional arrangement matter: the economic relationship the UK and EU has during this time-limited period must match as close as possible the status quo.'

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The letter added: 'It is vital that companies only have to undertake one adjustment as a result of the UK's withdrawal, not two – and that businesses, the UK Government and authorities in the EU have enough time to make the changes needed to deliver Brexit successfully.'

The letter appeared amid reports that the government may use the coming weeks to step up preparations for no deal in an attempt to force the EU's hand in negotiations by showing the UK is ready to leave without an agreement, in the hope that it could kickstart trade discussions with fewer concessions on an exit payment.

On Sunday, international trade secretary Liam Fox said leaving without an agreement and trading on World Trade Organisation (WTO) terms was 'not exactly a nightmare scenario' but stressed he would prefer to have a deal.