Businesses fear for UK's post-Brexit service sector as May meets Merkel
By Duncan Ferris
Date: Thursday 05 Jul 2018
(Sharecast News) - As Theresa May's cabinet prepare to decide their final strategy for a possible post-Brexit customs agreement with the EU, businesses in the UK are turning up the pressure on the Prime Minister.
Speculation is rife that the government will aim for a deal which would keep the UK in the single market for goods but pursue a far looser association for services, which comprise 80% of the value created by the UK economy.
Over 40% of exports to the EU last year were services, with a large majority being in areas outside banking services and the City of London.
Firms such as Rolls Royce have been attempting to pressure the UK government to protect the country's services, with the 52% of the company's revenue in civil aerospace stems from services such as long-term maintenance contracts on aircraft engines.
Some UK businesses, including Jaguar Land Rover (JLR), fear the UK will be lumped with a 'no deal' hard-Brexit which would inflict increased bureaucracy and border delays on international business.
On Thursday, JLR joined Airbus and BMW in warning the government over Brexit by stating that UK plants and at least 40,000 jobs are at risk if the country leaves the EU without a free trade deal.
Stephen Phipson, chief executive of EEF manufacturers' association, said: "People are starting to plan for the worst-case scenario. Just about everyone I've spoken to is starting to now go through this process."
Currently, Theresa May is in Berlin to meet with German Chancellor Angela Merkel, who was reportedly unimpressed by the Prime Minister's latest attempt at a compromise arrangement for customs after Brexit, seeing it as unworkable.
"The negotiations are reaching a decisive phase. Time is growing short and the political framework has to be declared already in October, so the British government's decisions over the next few days will be important," said Merkel.
Ahead of their crunch meeting on Friday, the Prime Minister's cabinet has struggled to be unified or consistent on the issue of Brexit, with foreign secretary Boris Johnson recently allegedly responding to pressure from UK firms by saying "f*** business".
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN