DEBATE: Do UK businesses need a Brexit transition deal on the same terms as the status quo?

Political turmoil is the single biggest threat businesses face (Source: Getty)

Do UK businesses need a Brexit transition deal on the same terms as the status quo?

Emma Jones, founder of small business support group Enterprise Nation, says YES.

The easy answer is “it depends” – but any transition deal would certainly have to be similar to the status quo. While the small businesses we speak to remain remarkably upbeat, there is absolutely no doubt that political turmoil and uncertainty is the single biggest threat they face.

Most British firms that export report that they export more to the EU than elsewhere. A trade deal with the EU that enables this to continue is a priority for them.

It’s not just about physical goods. A lot of our members operate in the creative and digital space. If the terms change radically and suddenly, they will have to invest in more complex systems to cope with the different VAT levies just to stand still and keep on selling in Europe. A more complicated and uncertain system could seriously impact profitability.

Firms of all sizes need a continuation of the current terms in order to keep them in business while they plan for the future.

Read more: Final deal must be in place before transition, May tells MPs

Steven Woolfe, an independent MEP who sits on the European parliament’s committee on economic and monetary affairs, says NO.

Businesses big and small are the lifeblood of our economy. For them, a stable economic environment is vital.

A transitional arrangement for our EU departure merely prolongs this uncertainty. A transition phase is no such thing – it’s just an extension of our current terms. By postponing Brexit, the more uncertain it becomes.

It delivers the worst of both worlds: we would be required to conform to all of the existing Brussels bureaucracy and red tape, but without a seat at the table to influence EU legislation and without the ability to strike our own trade deals.

During the course of our negotiations, we must remember that no deal is better than a bad deal. Our WTO membership affords us the luxury of a fall-back option. What is really scaring businesses is not the prospect of a no deal, but the lack of clarity about what a no deal will look like for them, so they can prepare. The government should make that clear.

Read more: Business groups warn David Davis of Brexit's risk to jobs as clock ticks

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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