Business groups join forces to savage Brexiteer calls for a 'managed' no-deal

Posted On: 
19th December 2018

Brexiteers' calls for a "managed no-deal" exit from the EU are "not credible", a coalition of major business groups has warned.

The group of business leaders said industry was "watching in horror as politicians have focused on factional disputes".
Credit: 
PA

In a scathing joint-statement, the team of industry chiefs including manufacturers' organisation EEF, big business lobby the CBI and the Federation of Small Businesses, accused MPs of being focused on "factional disputes" instead of protecting jobs. 

And the group - which also includes the British Chambers of Commerce and the Institute of Directors - tore into claims from leading Cabinet ministers that the impact of leaving the bloc without a deal could be lessened.

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"With just 100 days to go, the suggestion that ‘no-deal’ can be ‘managed’ is not a credible proposition," they said. 

"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."

They added: "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." 

The unprecedented joint warning comes just a day after the Cabinet ramped up planning for a no-deal Brexit, with an extra £2bn pumped into Whitehall's work on leaving  the EU without a deal.

The Cabinet is split over calls for a so-called "managed no-deal" if Theresa May's deal fails to get through the House of Commons in January. 

In a heated Downing Street meeting on Tuesday, Brexiteer International Development Secretary said a "managed guidepath" involving a two-year transition period would allow businesses to prepare for life after Brexit if MPs reject the deal the Prime Minister has struck with Brussels.

But Justice Secretary David Gauke shot back: "Managed no-deal is not a viable option. It’s not on offer from the EU and the responsibility of Cabinet ministers is not to propagate unicorns but to slay them."

'FUTURE COURSE OF OUR ECONOMY IN THEIR HANDS'

The Treasury and the Bank of England have both warned that a no-deal Brexit could cause major disruption to the UK economy, but Eurosceptics have argued that proper planning could lessen the impact and prevent the UK paying a substantial divorce settlement to the EU.

However, in a direct plea to MPs to block a no-deal exit, the business chiefs said: "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."

They warned that businesses were now "watching in horror as politicians have focused on factional disputes rather than practical steps that business needs to move forward".

"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," the group said.

"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."