World News

UK employers urge Johnson not to sacrifice services in EU deal

LONDON (Reuters) – Britain must not exclude its huge services industry from a planned trade deal with the European Union as the price for reclaiming control over its economy, a group representing British employers said on Monday.

The Confederation of British Industry urged Prime Minister Boris Johnson to secure a post-Brexit deal that will not leave out service industries, such as finance, something many employers fear if London and Brussels stick to their guns.

Avoiding costly red tape and customs complexities were also vital for goods companies, the CBI said.

Britain and the EU are expected to begin talks for a trade deal next month, leaving little time before a post-Brexit standstill period expires on Dec. 31.

Most economists polled by Reuters this month thought the most likely outcome would be a goods-only deal.

Relations between Johnson and some business groups have been strained by his dismissal of their concerns about Britain’s exit from the EU.

Carolyn Fairbairn, the CBI’s director-general, said British companies backed many of the government’s objectives for the negotiations, such as securing zero trade tariffs and allowing free flows of data.

“In other areas, how the government strikes the balance between access and control is less clear,” she said. “All efforts must be made in these talks to save exporters time and money, avoiding new paperwork, costs and delays.”

The CBI said it accepted that its once favored scenario of Britain remaining in the EU’s customs union was now dead, posing challenges for the world’s fifth-biggest economy.

London and Brussels are far apart on key issues, chief among them Britain’s insistence that it must be free to set its own rules for business while the EU wants a so-called level playing field on issues such as the environment and state aid.

The CBI said it agreed with the government that Britain had to be able to seize new opportunities by setting regulations for emerging technologies in areas such as artificial intelligence, digital payments and quantum computing.

“But for the UK to truly be spear-heading this new frontier, its world-leading industries must not be distracted by significant new burdens on their exports,” it said.

(Writing by William Schomberg, editing by Andy Bruce)