Britain's International Trade Secretary Liam Fox
European companies face potential tariffs of as much as 14 billion pounds ($18.28 billion) a year if the Britain and the European Union fail to reach a trade agreement, Britain's trade minister Liam Fox said on Monday.
"If we got no agreement with the European Union that would be very harmful to European trade too. European businesses would have to pay tariffs to access the UK's market, possibly to the tune of as much as 14 billion pounds a year," Fox told BBC TV.
"That is quite a big business tax to apply to European businesses. It is everyone's interest that we reach an agreement and do it as quickly as possible." ($1 = 0.7660 pounds)
Britain cannot be bullied, Brexit minister Dominic Raab said on Monday, sharpening the government's criticism of the European Union for taunting Prime Minister Theresa May and souring difficult Brexit talks.May's ministers have come out one by one at their party's annual conference in the city of Birmingham to warn the EU that they will embrace leaving without a deal if the bloc fails to show "respect" in the talks to end Britain's membership.Just six months before Britain is due to leave the EU in the country's biggest shift in foreign and trade policy in more than 40 years, May faces growing criticism over her plans to leave not only in her governing party but also in Brussels.Party unity is on ministers' minds, encouraging the faithful to direct their anger at the EU rather than at their prime minister, who some eurosceptic campaigners accuse of leading Britain towards a "Brexit in name only".Britain's FTSE treads water, eyes on Tory conferenceOther ministers, such as finance minister Philip Hammond, have moved to point out that leaving without a deal could hurt Britain's economy, the world's fifth largest.Raab said he had called on the EU to match the "ambition and pragmatism" Britain had put forward with May's Chequers proposals, named after her country residence where an agreement with her ministers was hashed out in July."Unfortunately, that wasn't on display in Salzburg," he said, describing a summit last month in the Austrian city where EU leaders rejected parts of the Chequers plan."Our prime minister has been constructive and respectful. In return we heard jibes from senior leaders and we saw a starkly one-sided approach to negotiation."Sterling rises despite fears of Tory Brexit conflict"What is unthinkable is that this government, or any British government, could be bullied by the threat of some kind of economic embargo, into signing a one-sided deal against our country's interests," Raab said.Instead of the much-hoped-for staging post, the Salzburg summit has become a byword for a sharp deterioration in the atmosphere of the talks, when British government officials felt May was ambushed by the other EU leaders over Brexit.A tweet by European Council President Donald Tusk showing him offering May a selection of cakes with the comment: "A piece of cake, perhaps? Sorry, no cherries" "certainly had an impact", one official said."GET SERIOUS"With no divorce deal and a standoff over the shape of any future relationship, the possibility of a "no deal Brexit" has increased, with some businesses preparing for what they see as a worst case scenario.Britain's Hammond says UK can cope with no-deal BrexitBut one source close to the government said there was now a sense that the EU had realised that the tone set in Salzburg was "perhaps a bit off" and, behind the scenes, conservations between the two sides were more constructive.Hammond, for one, was keen to set a more positive tone."The mood is undoubtedly that people want to do a deal with the UK," he told BBC TV."Clearly there has been a hit to the economy through the uncertainty the Brexit process has caused. Many businesses are sitting on their hands frankly waiting to see what the outcome of this negotiation is before confirming investment plans."UK's Hammond says EU is in the mood for a Brexit dealBut his softer line won less support at the conference than those adopted by Raab, trade minister Liam Fox and foreign minister Jeremy Hunt, who on Sunday compared the EU with the Soviet Union which could turn into a prison from which not only Britain would want to escape.It was Raab, winning a standing ovation for his story about his father's journey from then Czechoslovakia after the Nazi invasion, who summed up Britain's new combative stance."The EU's theological approach allows no room for serious compromise," he said. "If the EU want a deal, they need to get serious."
'Don't bully us', Britain takes new combative tone to Brexit talks
The pound rose after Britain's finance minister said on Monday the European Union was willing to do a Brexit deal, but investors said uncertainty surrounding the ruling Conservative Party conference could quickly reverse the currency's fortunes.At her party's annual conference this week, Prime Minister Theresa May will defend her plan for leaving the EU where critics like ex-foreign secretary Boris Johnson could openly defy her.Six months before Britain is due to leave the EU, currency traders are focused on events like the conference and an upcoming EU summit for signs of whether the UK will clinch a deal."Deep divisions within the party could turn this conference into a disaster for May, which could easily have negative effects for sterling," said Thu Lan Nguyen, an FX strategist at Commerzbank AG in Frankfurt."The government might end up without any Brexit plan whatsoever. Whichever way one looks at it, the next few days will be uncomfortable for sterling."Finance minister Phillip Hammond told the BBC on Monday, "The mood is undoubtedly that people want to do a deal with the UK."The pound edged up 0.2 percent versus the dollar to $1.3050 and to 88.82 pence against the euro.Sterling came under pressure last week as optimism for a Brexit trade deal faded and the dollar surged.Other analysts said investors would refrain from trading on negative Brexit headlines that did not alter the odds of a no- deal Brexit."We would see any dips in the pound in and around the Tory Conference as an opportunity to buy the currency – with a deal on the Irish border backstop to see a sharp re-pricing to $1.36-1.38, " said ING currency strategist Viraj Patel.Hammond said on Monday that doubts about Britain's future had already hit the economy and the next few weeks would be crucial in securing an exit agreement."Many businesses are sitting on their hands, frankly, waiting to see what the outcome of this negotiation is before confirming their investment plans," he said.Businesses have expressed frustration over the government's lack of clarity on Brexit and what some see as a decision to put ideology before the economy.Last week, Britain's opposition Labour Party sought to woo business bosses, although it also proposed a raft of radical economic policies, saying the Conservatives had given them the opportunity to pitch an alternative leftist strategy .
Sterling rises despite fears of Tory Brexit conflict