This survey (Reuters - HERE) showing over 60% of European companies plan to cut back orders on British suppliers because of the uncertainty and the slow progress of the talks is really no more than anyone should expect. It's an entirely predictable result of the government's attitude to the talks. Stubbornly resisting EU demands to spell out what we think we owe might seem macho as a negotiating ploy but people's jobs are now at stake. It is not even as if the EU are asking us to pay a specific sum. All they want is a clear position on our part so that they can see the areas of agreement and disagreement. Negotiations can then begin in earnest.
And the paradox is that it is the likely reaction of the loony Brexiteers from the Tories, the party of business, that is preventing the government agreeing a clear list of commitments. They think the money is our strongest card, to be used to extract a good trade deal. That money is our best card is undoubtedly true, but the weakness of our position with a clock ticking all the time will soon show that it is nowhere near strong enough. We will have to concede the money before we can even start trade talks. Reports are already appearing (HERE) that Mrs May has used officials to quietly indicate to the EU we are prepared to pay up to £53 billion. Whether this will be enough remains to be seen, but it will be essential for it to be made in writing with absolute clarity before the EU council accept it.
Whatever total is finally agreed for the so called divorce bill it will be tiny in relation to the nation's finances and future trade. It is like haggling over the price of a bucket when your house is on fire. Penny wise and pound foolish.
Mrs May is giving a speech today at the CBI to try and placate businesses that are becoming increasingly nervous at the lack of agreement on a transition period. The fact that she said she wouldn't "accept" a transition period unless a trade deal was already agreed alarmed many companies. She is frantically backpedalling on both the money and the sequencing - as everyone said she would have to eventually.
