EU unimpressed by May’s Brexit plans – but Witty commends ‘edge’

Prime Minister Theresa May set out a bold vision for the UK outside the European Union yesterday, confirming that the country would be leaving the single market – a move which most interpreted as a ‘Hard Brexit’.

Most of May’s speech focused on the desire of the UK government to strike a mutually beneficial free trade agreement with the EU, with as much as access to the single market as possible.

However responses from many leading European politicians show they are unimpressed by May’s stance, and believe the UK still wants Europe ‘a la carte’ - picking the elements they like (free trade) while shunning those they don’t (free movement of people) – something they say cannot be achieved.

The prime minister also warned Europe that an attempt to punish the UK through an unfavourable deal would be “an act of calamitous self-harm for the countries of Europe.”

May also made a veiled threat that in the event of such a ‘punitive’ deal, the UK could pursue a tax-haven approach to its economy, aimed at enticing businesses away from the EU.

Guy Verhofstadt, the chief Brexit negotiator for the European parliament, was quick to reply on Twitter. He threw the idea back at May, saying this negotiating stance would “hurt British people”.

https://twitter.com/GuyVerhofstadt/status/821420358435794945

For EU politicians, the future of the EU looks more in doubt than ever before, with Donald Trump also directly undermining it, claiming more countries will leave the union.

https://twitter.com/GuyVerhofstadt/status/821685216892817409

Pharma’s reaction

Theresa May’s speech had been long awaited in the UK and beyond, after more than six months in which the government had failed to indicate what sort of Brexit it favoured.

Attending the World Economic Forum in Davos was GSK’s chief executive Sir Andrew Witty.

Asked by the BBC for his reaction, Witty welcomed the clarity brought by the speech.

“It really codified what many of us had been anticipating since the referendum result, particularly around the single market,” he said.

GSK is the UK’s biggest big pharma company, and Witty has been vocal in supporting the country since the Brexit vote last June.

Commenting on the warnings to Europe in May’s speech he said:

“I think what we have today is the government’s willingness to put a bit of ‘edge’ into the negotiating dynamic. I think that makes a lot of sense – trade negotiations are negotiations, and you have to be pretty tough to get what you want.”

Despite the support from Witty, it is clear that most UK pharma executives – who were always against Brexit before the vote – had also been against a Hard Brexit as well.

A pharmaphorum survey conducted last month showed a clear preference for a Soft Brexit, which would have entailed negotiating on the basis of staying within the single market or at least within the customs union.

May’s plan for a clean break from the EU will give British negotiators a clearer starting point, but doesn’t solve the clear contradiction of the UK wanting unfettered access to the single market, but also new controls over immigration.