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If Theresa May wanted her speech at Davos today to reassure British businesses about a post-Brexit UK, I’m not sure it did. Whilst she did reiterate her vision of a “Global Britain” “open for business” she also went on the attack – she said that she expects businesses to pay their fair share of tax, recognise their responsibilities to workers and play by the same rules as everyone else.
(I’m not sure how her “fair tax” rhetoric squares with Philip Hammond’s recent threat that he will lure multinationals to our shores by offering lower taxes if we don’t get the EU trade deal we want, but I won’t dwell on this now.)
A globalisation that works for all was essentially her message today. It’s one we’ve heard before. But again her speech was light on detail. What actually is she going to do? When? And how?
Her speech on Tuesday in which she laid out her post-Brexit vision was another which was light on the “how” especially when it comes to trade.
I met with Dutch Finance Minister and President of the Eurogroup earlier today – Jeroen Dijsselbloem. He will be a key figure in the negotiations the UK is about to embark upon with the EU. And his message was clear. Theresa May might be telling us that a post-Brexit deal with the EU can be even better than the deal we currently have. But as far as he’s concerned, this simply isn’t feasible.
Dijsselbloem told me: “She’s trying to tell the British audience that you can have your cake and eat it. And it’s not possible. There will have to be compromises, there will have to be costs, trade will be more difficult and there will be an economic price.”
On our prospects for agreeing some sort of customs union arrangement with the EU post Brexit whilst at the same time pursuing bilateral free trade deals with the rest of the world he was unequivocal.
“It is not realistic to be in a customs union with the EU and at the same time have trade deals with other countries. It’s not possible. It’s not realistic. It’s not available”.
And as far as agreeing our new EU trade deal quickly? Well, Dijsselbloem made clear that this again was wishful thinking, very wishful. “We are heading for a very long and difficult negotiation” he said.
Until we “divorce” from the EU, unravel our existing relationship with it and sort out who will still pay for what, Dijsselbloem believes we cannot even begin negotiating a post-Brexit trade deal. How long will this unravelling phase last? Dijsselbloem thinks quite possibly as long as two years.
A trade deal with the EU not even starting to be negotiated for at least two years; a customs union in any shape or form simply not possible if we want to negotiate trade deals with other countries at the same time; a hard negotiation process ahead. For those businesses whose initial reaction to Theresa May’s speech on Tuesday was positive, Dijsselbloem’s words undoubtedly are not what they would’ve wanted to hear.