The government will this week publish a flurry of new position papers outlining its stance on some of the key issues in the Brexit negotiations, as it tries to seize control of the timetable for talks.
The papers will address a broad range of concerns, starting today with goods on the market. While that paper will address some issues around services associated with the trade in goods, the government’s position on the broader services industry post-Brexit – including financial services – remains uncertain.
The document outlining the government’s stance on goods trade will be accompanied by another on confidentiality of information exchanged, followed by papers this week on civil judicial cooperation, ending the jurisdiction of the Court of Justice of the European Union, and the flow of data across borders.
The papers come as Brexit secretary David Davis attempts to “drive the talks forward”, pushing the EU into discussing the post-Brexit relationship between the UK and the bloc.
However, Michel Barnier, the EU’s top Brexit negotiator, last week reiterated the need to agree the terms of withdrawal before turning to the future trading relationship. That would mean discussions around any future relationship would be reliant on sufficient progress having been made on citizens’ rights, the status of Ireland, and the so-called divorce bill.
Davis has made it clear that he is still pushing for the two sides negotiate the terms of exit alongside plans for a future deal.
“I firmly believe the early rounds of the negotiations have already demonstrated that many questions around our withdrawal are inextricably linked to our future relationship,” Davis wrote yesterday in the Sunday Times.
Davis promised more papers in the coming weeks. Frustration in the City is mounting as firms await more clarity on the status of financial services after Brexit.
Catherine McGuinness, policy chairman at the City of London Corporation, said: “While these position papers provide a slightly clearer direction for the wider business community, City firms need more clarity.
"While it is positive to see the government highlighting the importance of the wider services sector, the City still needs more information to help prepare for March 2019.”
Anthony Belchambers of the Legatum Financial Services Forum said the City must not be left as an “also-ran” in the Brexit negotiations, adding that the silence so far on the financial sector’s future outside the EU was “odd” given the UK economy’s reliance on services.
“The onus is on the government to make its position absolutely clear on financial services,” he said. The City will welcome a “uniform position” from the government, he added, with a strong desire for a transitional deal across many aspects of the financial services sector.
However, the transitional deal should not stop the UK making free trade deals outside the EU, Belchambers said, echoing a key concern of pro-Brexit economists.
A new analysis published yesterday by Patrick Minford, chair of the group formerly known as Economists for Brexit, suggested new trade deals could boost UK GDP by four per cent annually, with a further two per cent gain from deregulation. Total gains from unilaterally pursuing free trade, including removing tariffs and trade barriers, could reach around £135bn per year, according to the report.
The analysis was quickly disputed by some economists. Former Bank of England policymaker Andrew Sentance said the report “is not based on world trade realities”, while Open Britain, which campaigns for the UK to remain in the Single Market, said the unilateral removal of tariffs would lead to British manufacturing being damaged.