Out-Law / Your Daily Need-To-Know

BREXIT: Businesses seeking ‘clarity to begin planning’ from PM’s speech, says expert

16 Jan 2017, 3:06 pm

UK businesses will be hoping the prime minister gives them the “clarity” they need to begin planning for the UK’s exit from the EU in a major speech planned for tomorrow, an expert has said.

Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com, was commenting as Theresa May prepared to set out her ‘vision’ for Brexit in her first major speech of 2017.

“Tomorrow’s speech will be important in terms of the clarity it gives about the UK’s negotiation priorities and future direction,” Lougher said.

“Potentially, given concerns about transitional arrangements and a ‘Brexit cliff-edge’, what will be even more important is whether the speech gives sufficient clarity to allow business to begin planning how they will respond to and structure themselves in a potential post-Brexit environment,” he said.

The value of the pound hit its lowest level against the dollar for more than three months on Monday, following press reports that May would announce the UK’s intention to quit the EU single market, the BBC reported. A so-called ‘hard Brexit’ scenario would end the UK’s ability to trade freely with other EU member states, and to freely import goods from the EU, without additional tariffs or customs checks.

Retaining access to the EU’s single market is seen as the preferred option for the UK’s financial services industry, as this will enable it to continue to benefit from so-called ‘passporting’ arrangements which enable UK-based firms to trade in every EU member state without having to seek multiple authorisations. However, this is unlikely to be possible without freedom of movement, compliance with the relevant EU regulations and a financial contribution to the trading bloc.

Speaking at the Conservative Party annual conference in October, May set out her vision for a “fully-independent, sovereign” UK that was “no longer part of a political union with supranational institutions that can override national parliaments and courts”. She also said that the UK would not cede control over immigration rules to the EU as part of any trade negotiations.

May has set a deadline of the end of March for triggering Article 50 of the Treaty on European Union and formally beginning the two-year Brexit process. The Supreme Court is due to rule shortly on whether the government’s decision to do so must be subject to a vote in parliament.