May breaks Brexit stalemate but did Florence speech go far enough?
Jo Sellick, managing director of Sellick Partnership
Theresa May’s speech in Florence was delivered boldly and there were many mentions of creativity and partnership, but how realistic were the prime minister’s ambitions? A major focus in May’s address was around trade agreements, with the revelation that she will not be looking to adopt any version of an existing framework held with other countries, including the Canadian model. The other major point of the prime minister’s speech was that she is looking to secure a period of implementation which could last for two years after the UK officially leaves the EU in March 2019. During these two years, both parties would continue to be governed by existing rules while the transition takes place.
On this latter point around an implementation period, May suggested that it would bring back certainty among business owners and boost confidence for those who have been concerned about a sudden cut-off point in 2019 and the work required in the interim. Some added certainty around this is most definitely welcomed, but we must remember that the rest of the EU has not yet agreed to this two year period, or even responded to May’s desires, so business owners must continue to assume that the partnership will end as expected in March 2019 and make adequate preparations for this. Furthermore, if the implementation period does indeed go ahead, the prime minister explained that the UK would continue to cover its fair share of costs and commitments to the EU. This would surely come as a shock to those Brexiteers who voted to leave the EU based on the outlandish claims around how much money we contribute to Europe on an annual basis.
Regarding the trade agreement that May and her cabinet seeks, I am slightly concerned that this had led to yet more uncertainty about what the future holds. The prime minister pledged that she would not accept any existing model, as is seeking an agreement that is more creative and forward-thinking than any that has been introduced in the past. While this is a bold statement and will hopefully lead to a superior framework than any other, it does leave me wondering what the future holds for our business leaders who trade with other EU countries. At least if we had an existing model to work from we would have some idea of how the agreement could look, but we are now left with endless possibilities about the type of business we will be able to do in Europe once we leave the EU.
Finally, I, like many people I’m sure, was taken aback by the strong remark that Britain ‘never really felt totally at home in the EU’. Our government cannot afford to forget the slim margin by which the leave vote won. A huge number of people voted against Brexit and many argue that an even larger proportion would now vote to remain if the Referendum were repeated. May and her team must remember this at every step of her negotiations and acknowledge the fact that a vast number of Britons, including powerful business leaders, are very much in support of the EU and everything it stands for. While I agree that May must appear confident and ambitious in order to lead us through negotiations, I would urge caution around how much focus is placed on our desire for complete independence. The government remains conflicted on many levels, as demonstrated in Boris Johnson’s recent remarks, which makes us exposed and weaker in our negotiations. I will be closely watching the response from EU leaders as May’s address sinks in and hope that it will end the damaging stalemate that we have witnessed in negotiations so far.