The UK’s five biggest business lobby groups have urged the Government to secure a Brexit transition deal in order to maintain jobs and investment.

In a joint letter being sent to Brexit Secretary David Davis, the groups, including the CBI and the Institute of Directors, have demanded an “urgent agreement on transition arrangements to give businesses the certainty and time they need to prepare for a new UK-EU economic partnership”.

The letter, which has also been signed by the Federation of Small Businesses, British Chambers of Commerce and the EEF, will be sent to Davis this week as crunch talks with the EU continue.

A draft of the strongly-worded document, seen by Sky News and The Guardian, states: “Agreement [on a transition] is needed as soon as possible, as companies are preparing to make serious decisions at the start of 2018, which will have consequences for jobs and investment in the UK.

“And the details of any transitional arrangement matter: the economic relationship the UK and EU has during this time-limited period must match as close as possible the status quo.”

The Government insists talks are progressing, but businesses are growing anxious about a perceived lack of development in negotiations with Brussels.

Transition phase concern

Uncertainty remains over whether the UK will remain a part of the customs union with the EU during a transition period, sparking doubts about the movement of goods between nations.

The five business groups, which collectively represent millions of workers, have urged MPs to maintain Britain’s participation in the single market and “the current terms of a customs union” during the transition phase.

The groups argue the move “would provide the greatest economic continuity and could be agreed quickly, ensuring discussions could move swiftly on to our long-term future relationship with the EU”.

They add that the transition should “last until a new deal is in force” in order to provide businesses with “enough time to adjust”.

“It is vital that companies only have to undertake one adjustment as a result of the UK’s withdrawal, not two”

Letter from business groups

Prime Minister Theresa May has suggested that the transition period could last for around two years, during which the UK would trade with the EU on similar terms to those it currently operates under.

However, EU negotiators want more concessions on the UK’s so-called “divorce payment” from the union before starting talks on trade and transition.

The letter adds: “It is vital that companies only have to undertake one adjustment as a result of the UK’s withdrawal, not two – and that businesses, the UK government and authorities in the EU have enough time to make the changes needed to deliver Brexit successfully.”

A spokesman for the Department of Exiting the European Union said: “We are making real and tangible progress in a number of vital areas in negotiations.

“However, many of the issues that remain are linked to the discussions we need to have on our future relationship.

“That is why we are pleased that the EU has now agreed to start internal preparatory discussions on the framework for transitional arrangements as well as our future partnership.”