British business leaders on Saturday urged the government to rule out a hard break with the European Union, saying the uncertainty over the terms of Brexit was impacting investment decisions. "What we would like is the ruling out of the really worst options," Carolyn Fairbairn, the director general of CBI, Britain's biggest business lobby group, told BBC radio.
She outlined her case in an open letter to the government which was also signed by the heads of the EEF manufacturers' association, the International Chamber of Commerce UK and the techUK technology industry body. They warned against a situation where Britain leaves the EU single market without having a new trade deal in place, meaning it would revert to trading under World Trade Organisation rules.
"Falling into WTO rules in only 29 months from now, which is the prospective timetable, would mean up to 90 percent of goods could potentially have tariffs on them," Fairbairn said. She said ruling out "some of these really negative options would "help to reassure investors that the UK was still a really good place to invest". The letter calls for continued barrier-free access to the EU's single market, particularly for financial services, and for a transitional deal to give businesses certainty until a new deal with the EU is agreed.
It comes after a tumultuous week of increasing market nervousness over Brexit, culminating in a "flash crash" of the pound to strike a 31-year low against the dollar. Britain's finance minister Philip Hammond downplayed the flash crash, blaming "technical factors" in the market.
Prime Minister Theresa May, who took over following the June 23 vote to leave the EU, has said she intends to start the two-year process of withdrawal by March next year. While giving few details of her strategy, she has indicated that she will prioritise cutting immigration - a key issue in the referendum campaign - over access to the single market. "The government must set out a clear roadmap for consulting with firms of all sectors and sizes to increase confidence that these complex decisions are taken on the basis of fact and a genuine understanding of the economic implications," the business leaders' letter concluded.
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