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ICAEW backs business trade deal plea

20 October 2020: ICAEW has joined business groups representing seven million UK workers to make an urgent plea for a UK-EU trade deal, stating a deal is pivotal to post-COVID recovery.

The public letter, signed by 70 other professional bodies and trade associations across industry sectors, is calling on political leaders to work through the current impasse and secure a quick agreement or risk jobs and livelihoods. 

Signatories including the chief executives of Build UK, the CBI and Energy UK warn that uncertainty about the UK's future trading relationship with its largest market is "chipping away at business resilience" at a time when many firms are being battered by coronavirus.

Clarity on an ambitious deal will turbo-charge business preparations and increase confidence in the UK as a place to invest, the letter says. “It will help investment by removing the threat of tariffs and quotas. And it will catalyse confidence through enhanced customs cooperation while making a precious data agreement possible, vital for services industries which make up 80% of the UK economy.”

Businesses are doing what they can to prepare for Brexit, the letter continues, but they face a hat-trick of unprecedented challenges: rebuilding from the first wave of COVID-19, dealing with the second and uncertainty over the UK’s trading relationship with the EU. According to signatories, more than three-quarters of UK firms say they need a deal quickly.

It follows a similar call to action last week by leading European business groups across France, Germany and Italy, calling on leaders of both sides to “explore all possible options to reach a solution which ensures smooth trade conditions, while maintaining the conditions for fair competition between the Union and its British partner.”

Michael Izza, ICAEW Chief Executive described the outcome from the most recent EU Summit as “disappointing” and said many companies had been awaiting the results of the UK-EU negotiations before investing time, money and effort in preparing for the end of the transition. 

“Time is critically short. It is difficult to overstate the scale and complexity of the changes businesses will need to make. Government must move swiftly to support companies in adapting to whatever new trading relationship with Europe will start in January. Chartered accountants can play a key role in this but they - and the managers and directors they advise - need greater clarity in a number of basic and practical areas such as customs procedures and requirements. We ask government to make this a priority”.

Izza said ICAEW was hopeful of a comprehensive agreement that includes provision for the effective mutual recognition of professional qualifications and confirmation of equivalence with respect to statutory audit. “Uncertainty is never good news for business confidence, and we urge government to redouble its efforts to secure a fair deal which will help to stimulate and sustain the UK’s economic recovery,” he added. 

Downing Street has said the UK should be prepared for the alternative of a much more limited relationship, based on the EU's existing arrangements with Australia. This would mean trade between the two partners would default to World Trade Organization rules with tariffs applied on goods crossing the channel once the UK leaves the EU's single market at the end of the year, pushing up the cost of imports and exports.