BrexitDec 12 2016

MPs want evidence of effect of Brexit on businesses

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MPs want evidence of effect of Brexit on businesses

The Treasury select committee has called on firms to provide evidence on how the UK's withdrawal from the European Union will effect their businesses.

The call for evidence came four months ahead of prime minister Theresa May's stated deadline for triggering Article 50, formally beginning the two-year "divorce" proceedings of the UK from the European Union.

The committee requested feedback on whether transitional arrangements would be needed, and if so, what they might be.

“Many firms are understandably concerned that in April 2019, the government’s current timetable for leaving the European Union, they will be faced with a sudden change in their operating environment," committee chairman Andrew Tyrie MP said. 

“Transitional arrangements could offer firms some protection.

“If it were concluded that transitional arrangements are likely to be needed, obtaining them would probably be an early and important objective of the negotiations," he said. 

He said the failure to introduce such arrangements could lead firms to conclude that they could not afford to wait, leading them "to act pre-emptively to protect their shareholders’ interests".

"This action could include some cancellation of investment and/or relocation out of the UK, to the detriment of the British economy, and important parts of the financial services industry," he said.

The select committee called for evidence from "firms, trade bodies, regulators, experts and any other interested parties" on three areas: desirability of transitional arrangements, their design, and how they should be negotiated.

The committee stated the need for transitional arrangements came up during committee hearings with Bank of England governor Mark Carney, chancellor Philip Hammond, and Financial Conduct Authority chief executive Andrew Bailey. 

Mr Bailey told the committee that the FCA had not given "a lot" of thought to transitional arrangements, adding: "I have always thought that the answer to the transitional question is somewhat conditional on the answer to the second point, which is where we are landing, to use the analogy."

The deadline for submissions is 31 January 2017. Submissions can be made by clicking here

james.fernyhough@ft.com