1. ITV Report

Business groups raise alarm over Brexit deal in private letter

Britain's Brexit Secretary David Davis attends a press conference with European Union (EU) chief negotiator Michel Barnier. Photo: PA

Influential business leaders have called on the government to agree a Brexit transition deal “as soon as possible,” with jobs and investment at risk.

In a private letter to Brexit Minister David Davis, obtained by Sky News, five business lobby groups requested a transition period that mirrors current EU trading arrangements as closely as possible so that firms can start making "serious decisions" for next year.

Theresa May has requested a transition of two years on broadly current trading terms, however EU leaders are demanding more concessions from the UK regarding the exit bill before they discuss a future tradition relationship.

The draft letter was reportedly signed by the CBI, British Chambers of Commerce, manufacturing trade body EEF, the Institute of Directors and the Federation of Small Businesses.

"Agreement (on a transition) is needed as soon as possible, as companies are preparing to make serious decisions at the start of 2018, which will have consequences for jobs and investment in the UK,” it said.

"And the details of any transitional arrangement matter: the economic relationship the UK and EU has during this time-limited period must match as close as possible the status quo."

The letter continued: "It is vital that companies only have to undertake one adjustment as a result of the UK's withdrawal, not two - and that businesses, the UK Government and authorities in the EU have enough time to make the changes needed to deliver Brexit successfully."

Responding to the letter, Labour MP Chuka Umunna said: "Business groups are understandably alarmed by the Government's lack of progress in the talks. And the full-blown Cabinet disagreements over how a transition period would work make it even less likely that a deal will be reached.

"No deal would be devastating for business, for people's jobs and wages and for national security. The Prime Minister needs to face up to the reality of the situation, stop pandering to the ideological zealots driving the country towards a cliff-edge, and commit to staying in the Single Market and Customs Union."