BT Chairman Pushes for Brexit Transition Deal of Up to a Decade

LONDON (Capital Markets in Africa) – Prime Minister Theresa May is struggling to make headway in Brussels securing a two-year trade transition after Brexit. Now, she faces a call to push for as much as a decade.

Two years isn’t enough to transpose legislation and regulation from the European Union and negotiate new treaties, BT Group Plc Chairman Mike Rake said Friday in an interview on Bloomberg TV. Businesses need five to 10 years access to the single market and customs union, so they can continue to invest while new trade treaties are drawn up, he said.

“It really is a critical moment where we need to try to move forward and break this deadlock,” Rake said. “My personal view is that if we could come to a sensible transitional trade arrangement with the European Union, I think the pound would go back up.”

A longer transition may be tough for May to negotiate while on shaky ground with EU leaders and within her own party. Talks on the divorce bill have stalled over the U.K.’s financial obligations, raising the threat of a so-called no-deal Brexit. German Chancellor Angela Merkel injected some optimism this week, indicating that there’s “zero indication” that the talks won’t succeed.

BT Group Chairman Mike Rake talks about the consequences of Brexit and the need for a long-term transition period.

The U.K. economy is already suffering after the June 2016 referendum to leave and from uncertainty about the nature of the exit and future trade, Rake said, pointing to the pound’s devaluation, inflation, reduced investment and concerns over labor availability. Jobs are poised to move out of the U.K., said Rake, who has long been opposed to Brexit.

“We need that period where we can effectively get access to the single market, have access to the customs union because of an integrated supply chain, because of the cost of doing this and ensuring that we have that time frame that we can continue to invest and establish the future trade treaties,” Rake said.