LONDON: October 12, 2016. News that the value of Sterling fell to a record 168-year low against a basket of other currencies this week, follows an announcement by four heads of leading UK industry associations that adopting World Trade Organization (WTO) rules in a post-EU environment "would do serious and lasting damage to the UK economy".
In an open letter to the British government, Carolyn Fairbairn, director general of the Confederation of British Industry (CBI); Terry Scuoler, CEO of The Manufacturer's Association (EEF); Chris Southworth, secretary general of the International Chamber of Commerce UK (ICC); and Julian David, CEO of technology association techUK said they respected the public vote to leave the EU, but not if it causes living standards to decline.
"The way in which we leave the EU and on what terms is of critical importance to jobs and investment in the UK," they said.
The four leaders, representing a significant majority of British employers, said Theresa May's government must deliver "a barrier free access to the EU's Single Market, which is vital to the health of the UK economy, especially to our manufacturing and service sectors".
They also called for maintaining uninterrupted market access for the country's financial services sector, saying it was critical to growth and job creation among small, medium and large British, and international businesses.
If Britain left the EU without any preferential trade arrangement and defaulted to standard WTO rules, 90 percent of UK merchandize trade with the EU would be subject to new tariffs, the group said. This would result in a 20 percent increase in costs for the UK's food and beverage industry and 10 percent rise for car manufacturers.
"Every credible study that has been conducted has shown that this WTO option would do serious and lasting damage to the UK economy and those of our trading partners. The government should give certainty to business by immediately ruling this option out under any circumstances," the industry leaders added.
Noting the government's announcement of triggering Article 50 to leave the EU by 2019, they claim negotiations will not be completed within the expected two-year time frame: "Many areas of regulation now up for discussion are highly complicated; whether in financial services, data protection regimes or the interconnection of energy supplies," declared Fairbairn (above) together with her peers.
"The government should therefore secure agreement of a transitional period, to ensure that businesses can continue to operate with no 'cliff edge' change to current circumstances until regulatory and legal changes can be implemented," they continued.
Responding to media reports that some UK government ministers are indifferent to the advice of trade experts, the group said it was vital "that the on-the-ground expertise of British and international business is used to increase confidence that these complex decisions are taken on the basis of fact and a genuine understanding of the economic implications".
The open letter follows a 19 percent drop in the value of Sterling against the US Dollar and a recent KPMG study that concluded many UK firms are now considering relocating operations or headquarters away from Britain as a result of the Brexit vote.