Theresa May's Brexit plan 'alarming for businesses in both UK and Ireland'
The UK will negotiate a new customs union deal for with the EU but will leave the single market, the Prime Minister has revealed.
And Theresa May reiterated that “nobody wants to return to the borders of the past” between Northern Ireland and the Republic following Brexit.
But business groups say it is “alarming” that the”UK Government’s concerns regarding immigration outweigh their need to retain membership of the EU single market and customs union”.
Mrs May says she wants to negotiate a new form of customs union. Concerns have already been raised that leaving the union would have a "disruptive" and "unique threat" to cross-border trade here.
Countries within the customs union, which are not part of the EU or single market, include Turkey.
Mrs May said that her plans for Brexit cannot allow continued membership of the single market, which would require free movement of people and accepting the jurisdiction of the European Court of Justice.
She said that she wanted to remain part of a customs agreement with the remaining 27 EU states, but said she had an "open mind" over whether this would be through associate membership of the customs union or through some other arrangement.
Mrs May said she hoped to retain “freedom for financial services across borders” - something which could be significant for back and middle office jobs in Belfast.
She said remaining in the single market would mean "to all intents and purposes" not leaving the EU.
"As a priority we will pursue a bold and ambitious free trade agreement with the EU."
Mrs May said the UK would seek the "greatest possible access" to the single market through a "new, comprehensive, bold and ambitious free trade agreement".
The deal could take in elements of single market arrangements in areas such as the automotive industry or financial services, she said.
"An important part of the new strategic partnership we seek with the EU will be the pursuit of the greatest possible access to the single market on a fully reciprocal basis through a comprehensive free trade agreement," she said.
John McGrane, director general of the British Irish Chamber of Commerce, said “while some of the content of what Mrs May said raises some concern, it is helpful that at least now the waiting is over and we have a good sense of what the UK negotiating position will be”.
“It is clear from this statement that the UK Government’s concerns regarding immigration outweigh their need to retain membership of the EU single market and customs union. This will be alarming for businesses operating in both the UK and Ireland, many of whom rely on the bilateral trade between our two countries for the over 400,000 jobs they sustain.”
“Given Ireland’s greater dependence on UK trade than any other EU country, we feel it is only right that the EU understands the importance of this relationship for both islands and accommodates the special trading relationship between us. This includes maintaining the Common Travel Area limiting border control on the island of Ireland.”
Ann McGregor, chief executive of Northern Ireland Chamber of Commerce and Industry, said:
"Businesses have been dealing with a lot of uncertainty in the past six months and they will therefore welcome some guidance on the type of Brexit the UK is seeking.
"The Prime Minister has said her plans for Brexit cannot allow the UK to remain in the European single market but that she will work to get an ambitious free trade agreement with the EU. Negotiating agreements can take years and it would therefore be good to hear what is planned in the interim to allow for the freest possible trade in goods and services between the UK and EU.
"The single market has had a positive impact on how our members do business nationally and internationally so outside of it their ability to trade successfully must be maintained in any new deal.
"We welcome her commitment to maintaining the common travel area with the Republic and making it a priority to deliver a practical solution as quickly as possible to the question of the land border with the Irish State.
"The Prime Minister says she also wants a customs agreement with the EU which could mean partial membership of the customs union. However, NI Chamber believes that this must come without costly customs checks and administrative costs for businesses which would pose a threat to Irish cross-border trade."
And Glyn Roberts, chief executive of the Northern Ireland Independent Retail Trade Association, said:
"It is very clear the Prime Minister has decided on a hard Brexit by indicating the UK is leaving both the EU single market and customs union. This is clearly not good news for Northern Ireland, nor the border with the Republic, despite vague assurances around ‘no return to the borders of the past’.
“What should happen is that governments in Dublin, Belfast and London must ensure that Brexit does not result in the hardening of the border and that no barriers whatsoever are placed on trade or workers from across the EU.
“EU nationals currently working in Northern Ireland make a huge contribution to our local retail, hospitality and food sectors and it is good news that the PM has given assurance that they will still be welcome here whatever Brexit may bring and we repeat our call that they should not be used as a bargaining chip in the negotiations.
“Disentangling the UK from the EU is going to be both time consuming and tricky and we need to ensure that we leave on the best possible terms with our European partners.
“Northern Ireland needs some degree of special status in its relationship with the EU and we call upon the NIO to produce a draft model of what that will look like, which could form the basis of negotiations.
“Whatever new relationship is made with the EU it must reflect Northern Ireland’s unique circumstances. A post-Brexit Northern Ireland needs to be a self-confident, outward looking innovative region, which is the very best place in the UK and Ireland to locate or start a business."