Strike Brexit transition deal? urgently, bosses to tell Davis

Sky News has seen the draft of a letter to be sent in the coming days to David Davis which warns that the need for comprehensive transitional arrangements is urgent to prevent major companies activating Brexit contingency plans.

The letter, which is being coordinated by the CBI, is being circulated among leading industry bodies covering sectors such as chemicals, aviation, food, pharmaceuticals and retail.

It will increase the pressure on ministers to secure an effective transition deal at a meeting of the EU Council ?later this month.

In the draft letter, the industry groups? welcome recent speeches by Mr Davis and Theresa May, who have committed to agreeing the terms of an implementation period that would last for about two years after Brexit.

However, they warn that finalising an agreement is now urgent because “for many companies in our membership, the first quarter of this year is decision time for contingency plans”.

“Transitional arrangements that provide continuity and stability through protecting the benefits of the single market and customs union would be a welcome step in ensuring that many of those contingency plans do not have to be put in place,” the letter states.

The employers’ groups outline two ways in which the Government can secure continued influence over European rules which affect the UK.

The first, maintaining membership of or access to EU agencies and regulators, “would support many of the country’s high-value businesses working in extremely technical fields to influence rules that update very rapidly and outside the legislative process,” according to the draft.

Mrs May said in a speech last week that Britain would seek associate membership of EU agencies covering aviation safety, chemicals and medicine in return for an as-yet undetermined payment.

While her remarks were welcomed by many UK-based executives, they have received a lukewarm response in Brussels, where many EU hardliners believe the request is an example of Britain’s ‘cherry-picking’ approach to Brexit.

The other approach outlined in the CBI-led letter describes a new mechanism under which the UK would have a say on future legislative changes.

“This could potentially be through the right for the UK Government to submit legal opinion on developments as legislation is passing through the European Parliament, or the continued clear permission for UK businesses to input into consultations,” it says.

“This will be particularly important for sectors that do not have one single body that oversees the technical rules that govern their sector, but rather many rules.”

Sources said on Friday that the letter was expected to be signed by associations whose collectively membership employs millions of private sector workers.

They added that it would be sent to Mr Davis ahead of the EU Council meeting?, and probably as soon as next week.

The CBI declined to comment.