Warning of no time to prepare
Businesses ‘watching in horror’ as Cabinet plots No Deal Brexit
Adam Marshall: ‘Businesses are unprepared for no deal’ (pic: Terry Murden)
Businesses have warned there is no time to prepare for a No Deal Brexit and are switching investment out of the UK.
Five trade bodies have issued a statement saying businesses are “watching in horror” as in-fighting among politicians delays a decision on Britain’s future.
The British Chambers of Commerce, the CBI, the EEF, the Federation of Small Businesses and the Institute of Directors said: “Businesses have been watching in horror as politicians have focused on factional disputes rather than practical steps that business needs to move forward.”
Their message was issued as the Cabinet met to prepare for there being no agreement ahead of the UK’s withdrawal from the EU in 100 days on 29 March.
Exasperated businesses are now warning that investment is being delayed or switched out of Britain while some are stockpiling raw materials to ensure continuity of operations.
Adam Marshall, director general of the Chambers, said: “Businesses are unprepared and it is up to parliament to say what sort of outcome it wants for the UK.”
No Deal management ‘not credible’
The statement from the five group says the suggestion that ‘no-deal’ can be ‘managed’ is not a credible proposition.
“The lack of progress in Westminster means that the risk of a ‘no-deal’ Brexit is rising,” says the statement. “Businesses of all sizes are reaching the point of no return, with many now putting in place contingency plans that are a significant drain of time and money.
“Firms are pausing or diverting investment that should be boosting productivity, innovation, jobs and pay, into stockpiling goods or materials, diverting cross border trade and moving offices, factories and therefore jobs and tax revenues out of the UK.
“While many companies are actively preparing for a ‘no deal’ scenario, there are also hundreds of thousands who have yet to start – and cannot be expected to be ready in such a short space of time.”
The statement adds: “All this activity stems from the growing risk of leaving the EU on 29 March without a deal. With just 100 days to go, the suggestion that ‘no-deal’ can be ‘managed’ is not a credible proposition.
No time to prevent ‘severe disclocation’
“Businesses would face massive new customs costs and tariffs. Disruption at ports could destroy carefully built supply chains. From broadcasters, to insurance brokers, to our financial services – the UK’s world-leading services sector will be needlessly disadvantaged, and many professional qualifications will be unrecognised across the EU. UK and EU nationals working abroad will be left in deep uncertainty about their future.
“As a result of the lack of progress, the Government is understandably now in a place where it must step up no-deal planning, but it is clear there is simply not enough time to prevent severe dislocation and disruption in just 100 days.
“This is not where we should be.
“The responsibility to find a way forward now rests directly with 650 MPs in Parliament. Nobody wants to prolong the uncertainty, but everyone must remember that businesses and communities need time to adapt to future changes.
“As the UK’s leading business groups, we are asking MPs from all parties to return to their constituencies over Christmas and talk to their local business communities. We hope that they will listen and remember that when they return to Parliament, the future course of our economy will be in their hands.”
A CBI survey shows that 80% of members have already reduced investment because of Brexit and 97% of those with contingency plans will be pressing the button on those plans by Christmas.
The CBI director general, Carolyn Fairbairn, described Wednesday night’s vote on Theresa May’s leadership as a “chaotic detour” that showed a complete disconnect between the Westminster bubble and business.
“Uncertainty is throttling firms and threatening jobs – not in the future but right now,” she said.
The CBI’s concerns were echoed by the Institute of Directors which said business leaders were “tearing their hair out” at the current state of negotiations.
“The last thing businesses needed today was even more uncertainty – and yet politics has managed to deliver on that once again,” said Stephen Martin, its director general.
No confidence vote
The SNP, Liberal Democrats, Plaid Cymru and the Greens have tabled a vote of no confidence in the UK government.
It follows an amendment from the opposition parties to Labour’s no confidence motion in the Prime Minster on Monday, as the motion was not given parliamentary time by the UK government.
SNP Westminster Leader Ian Blackford met Sir Vince Cable, Liz Saville Roberts and Caroline Lucas on Tuesday and a joint decision was taken to put forward the vote of no confidence in the names of the opposition leaders.
The decision follows constant pressure on Jeremy Corbyn to table a motion of no in the UK government under the Fixed Term Parliaments Act.
Mr Blackford said: “Opposition leaders have taken the decision to table a vote of no confidence in the UK government under the Fixed Term Parliaments Act – something Jeremy Corbyn has failed to do.
“Labour has failed to hold the UK government to account over their shambolic Brexit negotiations. Their motion of no confidence in the Prime Minister on Monday was a gimmick – we attempted to strengthen it with our own amendment and it’s regrettable it was not offered time for debate in parliament.
“By tabling our motion on Tuesday evening, we hope to be afforded time by the UK government to debate it before Parliament closes for the Christmas recess.
“It is clear the Prime Minister’s tactic has been to run down the clock and deprive parliament of any alternative to her deal. Jeremy Corbyn seems happy to let her – presumably to avoid having to make a decision on a second EU referendum. This is not acceptable and people deserve better.
“We want this motion to succeed but if it doesn’t, Labour’s only excuse for not backing a second referendum will be removed. We can then all get on with building a majority for that vote.
“Either way, if the official opposition won’t do its job, the real opposition will.”