May moves to make up with business

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Prime Minister Theresa May has shown a new interest in listening to British business. I'm here with the editor of the FT, Lionel Barber, to discuss what's changed.

Lionel, it's odd to me that a British prime minister should be in a situation where they have to make up with business. How did Theresa May get here?

Pretty astonishing, yes, that there was this gulf between British business and the prime minister in her first term. And I think this was a legacy of the referendum on Britain's membership in Europe, the Brexit referendum.

Mrs. May and her influential aides-- notably Nick Timothy, the chief of staff, joint chief of staff-- over-interpreted that result. They thought that the conservatives were too close to business and that we needed to take account of the disenfranchised, the people left behind by globalisation. As a result, literally in the first 12 months, British business could barely get through the door in Downing Street.

It's a situation where it's not clear what the prime minister can offer now. Not only is she politically weak, but she is only one half of a negotiation with a larger party. What do British business want to hear, and what can Mrs. May give them?

Well, first of all, large employers represented by the Confederation of British Industry have talked about a task force, a British business force on Brexit, because they think that they've got a lot of expertise about regulations, about standards-- all things highly technically detailed which are very important aspects of the Brexit negotiation with the EU 27.

So they want a seat at the table. They want a channel of information. And also, the second most important point is the one thing Britain needs at the moment is confidence-- confidence in the economy, confidence in government. And British business has something to offer in that respect.

Clearly, an important part of this discussion is going to be the transition period from where we are now to wherever it is we're going to end up when Brexit has been fully enacted. What kind of assurances can the prime minister give there, and what for that matter would the FT like to see out of a business-friendly transition to Brexit Britain?

Well, the first principle is actually that, not as happened before the election, the snap election, that Mrs. May retreats from her position, which essentially puts immigration, tightening immigration and not in any way being subjugated to the European Court of Justice, that the well-being of the economy is elevated to be as important or more important. From the FT's standpoint, that's--

The second is that we have a sense of a glide path out of the European Union when we leave. We voted to leave, after all. But we can't just fall out. And I think therefore, the whole concept of transition arrangements for business will be very important-- of course, not in the gift of the prime minister as such.

One specific area that's very important that brings up the European Court of Justice point you made is the European regulatory agencies-- things like pharmacy, nuclear power, airlines, and so forth. How can business have the stability they want of having their regulatory regimes not change quickly at the same time as Britain is not under the oversight of the Court of Justice, which of course, these agencies are to ultimately.

Well, in an ideal world-- and we may not be in an ideal world-- we may have some mechanism which is something between national jurisdiction and the European Court of Justice. I think that's going to be still a hard sell for the Europeans.

In a less ideal world, you'd say, look, it's a transitional arrangement. We need three to five years. We're going to be under the ECJ, but then we're leaving. We are actually leaving the hotel.

But for the moment, given the importance of certainty for business and regulatory standards, we will be in part in these agencies under their jurisdiction, and we'll pay money to remain in them for a transitory period.

And indeed, I don't think this needs to be interpreted as a diminution of British sovereignty. These are dispute resolution mechanisms, isn't that more or less right, rather than lawmaking institutions?

You're sounding a bit reasonable, Rob. Maybe that's because you're not a Brexiteer from Britain. You're just a sensible American from the east coast.

On that happy idea, Lionel, thanks very much.

Thank you, Rob.