Britain to leave EU without a deal if no decision reached by Oct 15: Boris Johnson

London

THE Brexit trade negotiations between the European Union (EU) and the UK are entering the final frantic stages in the hope that a deal can be reached by British Prime Minister Boris Johnson's proposed deadline of Oct 15.

In a phone call with European Commission president Ursula von der Leyen on Sunday, Mr Johnson said that Britain would leave without a deal if the deadline is not met.

But the overall view of both political and economic commentators is that "no deal" is an empty threat as both Britain and the EU desperately need a trade agreement.

Economies on both sides of the channel are still in a Covid-19 recession and growing unemployment crisis. Tariffs, customs and other trade impediments would add to UK and EU economic woes.

In a desperate move to push negotiators into a compromise, Mr Johnson and Mrs von der Leyen agreed to close the "significant gaps" that are currently threatening a new trade partnership.

The gaps are EU's desire for continued access to the UK's fishing waters, and that the UK government should not subsidise companies as there would not be a "level playing field" in trade competition. There should also be "equivilance" in governance and regulation.

Mrs von der Leyen and Mr Johnson instructed their Brexit negotiators, Michel Barnier and David Frost, "to work intensively in order to try to bridge those gaps".

In a joint statement, the two leaders stressed that they "agreed on the importance of finding an agreement, if at all possible, as a strong basis for a strategic EU-UK relationship in future".

Further trade talks are due in London next week and in Brussels the following week before the 27 national EU leaders meet over two days on Oct 15 and Oct 16 to assess progress.

The Brexit transition period, in which the UK has maintained EU trading rules, ends on Dec 31.

"The EU needs to understand that we need to control our own laws and regulation and fisheries," Mr Johnson said in a BBC interview on Sunday.

He added that he agreed with Dutch prime minister Mark Rutte that an EU-UK trade deal was a "geopolitical necessity". The UK wanted a similar deal to Canada, he said.

"Yes, we want a free trade deal with the EU, but any deal must be fair. The days of being held over a barrel by Brussels are long gone," UK Foreign Minister Dominic Raab told the Conservative Party's annual conference.

Carolyn Fairbairn, the boss of the Confederation of British Industry (CBI), said it was the time for " political leadership and the spirit of compromise to shine through".

The CBI carried out a survey of 648 companies which found only 4 per cent said they would prefer no deal.

Many business people have complained that due to the pandemic, they have not had the time to prepare for a changed relationship with the EU.

Financial services will not be part of this deal and bankers, insurance executives and asset managers are very concerned.

Catherine McGuinness, chairwoman of the policy and resources committee at the City of London Corporation which directly monitors developments in the City, the financial sector, said a deal on services was vital.

"We realise that financial services have been left to one side and that in itself is very disappointing," she said. But "leaving in an acrimonious way, without a sensible deal, is in nobody's interest".

JP Morgan and several other banks have been sending staff to Paris, Frankfurt, Dublin and Amsterdam to ensure that business in the EU continues as normal.

Accountancy firm EY estimates that 7,500 executives have left the City and have established offices in the key European financial centres.