Letter to candidates

CBI leader warns Tory hopefuls of No Deal ‘damage’

Carolyn Fairbairn

Carolyn Fairbairn, speaking this month in Edinburgh, has warned of ‘consequences’ (pic: Terry Murden)


Tory leadership hopefuls have been told they will forfeit their claim to be the voice of business if they pursue a no-deal Brexit.

They have been warned by CBI director general Carolyn Fairbairn that such an outcome would create “severe” consequences for UK businesses.

In an open letter to the candidates competing to replace Theresa May as Prime Minister, she said “compromise, consensus and honesty” was needed to end the Brexit impasse.

Bookies’ favourite Boris Johnson and fellow Brexiteer Dominic Raab, have insisted they would take the UK out of the EU on 31 October, with or without a deal. Esther McVey has said Britain should “actively embrace” withdrawal without an agreement.

Only Rory Stewart, who will be in Edinburgh today, and Matt Hancock have said no deal is not an option, while Jeremy Hunt has not ruled out extending negotiations beyond the Halloween deadline to get an agreement. Mr Hunt has warned that leaving with no deal would be “political suicide” for the Tories.

In her letter, Ms Fairbairn said her members’ “frustration” with Westminster had grown in recent years due to the failure to deliver on the result of the 2016 referendum.

She said the failure to resolve Brexit was already hitting Britain hard, diverting billions of pounds of investment out of the economy. She called on whoever becomes Prime Minister to work in partnership with business to ensure a prosperous future for the UK.

But she added: “The next Prime Minister can only claim the Conservatives are the party of business if they secure a Brexit deal that protects the economy, jobs and living standards.

“Firms large and small are clear that leaving the EU with a deal is the best way forward. Short-term disruption and long-term damage to British competitiveness will be severe if we leave without one. The vast majority of firms can never be prepared for no-deal, particularly our SME members who cannot afford complex and costly contingency plans.

“We need compromise, consensus and honesty to resolve the Brexit impasse, quickly. Prolonged uncertainty is damaging our economy now – driving up costs and reducing sales.

“Stockpiling of raw materials and goods among SMEs (small and medium-sized enterprises) is at a record high. Billions of pounds in investment are being diverted from the economy, harming future jobs and prosperity.

“The CBI urges the next Prime Minister to build their approach to Brexit from the bottom up – from the clear, detailed evidence of firms, on the ground, managing the day-to-day implications for jobs. Only then will the UK have the foundations for a world beating economy.”

A dozen Tory MPs have so far announced their intention to take part in the leadership race, with more expected to follow. Nominations close on 10 June and the new Prime Minister is expected to be in place by late July.

Rory Stewart will today meet students at the University of Edinburgh before visiting the Scottish Parliament for a private meeting. He will then meet members of the public across the capital.

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