Business is counting on Theresa May to break the Brussels impasse

Rachel Cunliffe
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Delegates Attend The European Council Meeting In Brussels - Day Two
This is May’s chance not only to reset the relationship, but reframe who the relationship is with (Source: Getty)

Theresa May let the Brexit negotiations get out of hand.

Her reckless decision to call a snap election and the disastrous result that followed mean the Prime Minister has spent the six months since the triggering of Article 50 fighting for her political life instead of for the country’s post-Brexit prosperity.

In her absence from the EU scene, the talks have become deadlocked. With a quarter of the exit period already elapsed, no official progress has been made that provides clarity for UK and EU businesses wanting to trade post-Brexit – not on financial services regulations, passporting, tariff barriers, work permits, or a host of other issues.

Read more: "Crunch time": City demands action from Theresa May on transitional deal

Before we can even begin to discuss such matters, whether as a transitional deal or a future trade agreement, the EU has insisted that we iron out an exit agreement.

And that exit agreement has turned into a personality contest between David Davis and Michel Barnier, haggling over the UK’s “divorce bill” and sniping at each other in the press after their monthly sparring matches.

Today that changes, as May speaks to Europeans in Florence and attempts to unlock the stalemate.

To do that, she must go over the heads of the European Commission bulldogs, led by Barnier, and speak directly to Europe’s leaders. Not the leaders of the EU, but the heads of government in the 27 member states who have their own parliaments and electorates to answer to, whose citizens will have to live with whatever deal – or lack of a deal – is hammered out in Brussels.

These businesses have been overlooked by the EU’s negotiators as much as their British counterparts have been by the government's slow progress.

Last week, the Council of British Chambers of Commerce in Europe released its research into the “voices of European businesses”.

Its pan-European report, surveying over a thousand businesses, found that the issues worrying our EU partners are remarkably similar to the questions UK companies have been clamouring for the government to address: barriers to trade, access to talent, disruption caused by the Brexit process, and a demand for continuity while details are worked out.

UK participation in EU markets was deemed “critical to the continue competitiveness of the EU as a whole”. In a straw poll, 67 per cent of EU businesses said they would be impacted by reduced access to UK innovation, with 65 per cent relying on cross-border transportation of goods to and from Britain.

Most crucially, 92 per cent said it was important for their government to negotiate a deal that did not increase barriers to trade. But only 27 per cent were confident that their government would take note of their views in negotiating with the UK.

This is the situation that should form the basis of May’s speech today, not the petty squabbles in her cabinet about who exactly is driving the Brexit car. UK and EU businesses are united in what they need from these talks. Member state governments have faced criticism from the EU business community for sticking their fingers in their ears to these concerns and letting the EU Commission take the wheel, but the Commission only has such a mandate because country leaders granted it.

Clearly, that approach is not working, and what should be a mutually beneficial negotiation about trade interests is viewed by the Commission as a zero-sum game and an opportunity to punish Britain, to hell with the Europeans who will suffer as a result.

This is May’s chance not only to reset the relationship, but reframe who the relationship is with. If government leaders can see that Britain is serious about moving forward and can be trusted to honour its commitments, they can start to challenge the EU’s grip on the negotiations.

Obviously that starts with a gesture of openness and generosity from May. It means providing certainty that EU citizens currently living in the UK can remain, and a promise to pay what we owe – at least as far as the current EU budget black hole goes.

It would also help to acknowledge that there is a discussion to be had about what Britain will contribute when it comes to longer term spending obligations (such as the pensions of EU officials and economic development projects).

As one of the EU’s biggest financial contributors, Britain’s chequebook carries weight and is our greatest source of leverage – providing other EU countries believe that we are prepared to be reasonable.

The hardline eurosceptics in the Tory party may scream that this is a flagrant concession. Let them. With just 18 months to go until we leave the EU and the prospect of crashing out with no deal looking worryingly plausible, it is more important for May to get the ball rolling than to pander to her backbenchers.

When she speaks today, Theresa May needs to rise above party politics and do whatever it takes to break the impasse – for the sake of the country, and for businesses on both sides of the Channel.

Good luck to her.

Read more: Leave architect says Florence speech will "fail" to break impasse

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