BRITISH business chiefs have warned that further delays to negotiations on a post-Brexit trade deal could have damaging consequences and called for a transition agreement as soon as possible.

Industry representatives in the UK released a joint statement welcoming European Union leaders’ agreement to move on to the second stage of Brexit negotiations, dealing with the transition to a new relationship.

The British Chambers of Commerce, Confederation of British Industry, Federation of Small Businesses, Institute of Directors and EEF, which represents manufacturers, said: “We welcome the fact that the European Council has approved the progression of talks to the discussion of a transition period, and a future trade relationship.

“It is our collective view that the transition period must now be agreed as soon as possible, to give businesses in every region and nation of the UK time to prepare for the future relationship. Further delays to discussions on an EU-UK trade deal could have damaging consequences for business investment and trade, as firms in 2018 review their investment plans and strategies.

“While our members will be pleased that EU citizens living and working in the UK have more clarity, it’s still essential that an unequivocal commitment on their future rights is made whatever the outcome of negotiations.

“We will continue to work with the Government to ensure that UK firms can overcome the challenges and take advantage of the opportunities that a new trading relationship with the EU and the rest of the world will bring.”

The letter was signed by BCC director general Adam Marshall, CBI director general Carolyn Fairbairn, EEF chief executive Stephen Phipson, FSB national chairman Mike Cherry and IoD director general Stephen Martin.

Labour MP Chuka Umunna, on behalf of the Open Britain campaign for close EU ties said ministers face the complexity and costs of Brexit, are ill-prepared and have insufficient time.

He said: “The clock is ticking, and we are far away from anything resembling a deal. Brexit is intractable and complicated, far more so than people were told at the time of the referendum.”

“Contrary to the claims of Brexiters who said that trade talks would begin speedily, we now won’t be able to discuss the future relationship until March at the absolute earliest. And the Cabinet has still yet to even discuss - let alone agree on - what form of relationship it wants the UK and the EU to have.

Voters have the right to keep an open mind about whether this is really the best future for our country.”

Liberal Democrat leader Vince Cable renewed calls for a referendum on the final deal.

“Now comes the hard part,” he said.

“The outcome of these talks will affect jobs, living standards and prices for years to come.

“Yet with just over a year to go, the Cabinet still can’t even agree on what they want the final deal to look like.

“The people must have a say on the terms of any deal, including the option of an exit from Brexit.”