U.K. Plc Wants End to Brexit `Soap Opera' in Bid for Certainty
(Bloomberg) -- U.K. business called for an end to the “soap opera” of Brexit and a return to the spirit of national unity last seen in World War II as it pushed for certainty on Britain’s future relationship with the European Union.
Confederation of British Industry President Paul Drechsler will appeal for a “single, clear strategy” in an address on Monday to the CBI’s annual conference in London. He won’t shy away from criticism of Prime Minister Theresa May, with a stringent rebuke for her “episodic approach” to negotiating Brexit, according to emailed excerpts of his planned remarks.
“I’m reminded of a prime-time soap opera, with a different episode each week,” Drechsler will say, before listing the premier’s Brexit interventions. “First Lancaster House, then Article 50, the European Council, two dinners with Juncker –- and no doubt many exciting installments to follow. Each one becomes the Big Story, until the next one rolls around.”
Britain faces a steady drumbeat of warnings from business about the need for certainty as the clock ticks down to March 2019, when Britain will leave the EU -- with or without a deal.
Bank of England Governor Mark Carney said on Thursday that Brexit is the biggest determinant of the U.K. economic outlook. Companies are holding back investment decisions as they wait to find out how Brexit will pan out, and banks including Goldman Sachs Group Inc. and UBS AG are preparing to move workers to mainland Europe.
The CBI gathering is taking place across the River Thames from Canary Wharf, a reminder to politicians of one of the industries most affected by Brexit. The venue has views of skyscrapers housing banks including Citigroup Inc., Barclays Plc and HSBC Holdings Plc.
If the U.K. fails to strike an EU deal, Brexit may cost 75,000 jobs in banking and insurance, Britain’s top banking regulator, Sam Woods, told lawmakers on Wednesday. Deutsche Bank AG may move about 4,000 positions to Frankfurt and Berlin due to Brexit, UBS Group AG will start moving London-based employees to expanded offices inside the EU next year, and Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein has signaled on Twitter in recent weeks that he’ll be spending more time in Frankfurt, and may not fill all the desks at the bank’s new London offices.
Most pressing of all for British companies is the need to pin down an agreement on a transitional deal to smooth the departure from the world’s largest trading bloc. According to CBI survey data released on Sunday, some 10 percent of companies have started implementing their plans for a “no-deal scenario;” by March, that will rise to 60 percent.
“The clock is ticking,” according to Drechsler, whose lobby group represents 190,000 businesses employing almost 7 million people. “Brexit is only 508 days away. But for many businesses, their alarm clocks are set even earlier than that. They’re set to the moment they will actually enact their contingency plans.”
After missing an October goal for progress, May wants Brexit negotiations to move on to discussing the future trading relationship and a transition deal before the end of the year.
U.K. Plc isn’t just concerned about their future ability to trade with the EU. Other pressing concerns include the nature of post-Brexit regulation and the availability of labor. The U.K. is at near full employment -- the jobless rate is at a 42-year low of 4.3 percent -- and key industries including the health service, construction and hospitality rely on a steady stream of EU nationals to fill vacant roles.
On Wednesday, Hitachi. Ltd’s Horizon Nuclear Power echoed the concerns of Electricite de France SA, saying it’s worried its ability to construct new atomic reactors in Britain will be hampered by labor shortages. That’s something that’s hitting the public sector too: on Thursday, the Nursing and Midwifery Council reported an 89 percent drop in a year in the number of new nurses coming from the EU.
Drechsler will say that British politicians should unite around the Brexit vision outlined by May in a speech in Florence, which included a call for a two-year transition phase after Brexit during which ties with the EU relationship would remain largely unchanged.
“I know that Brexit is a huge issue,” he’ll say. “But parliament has a proud history of meeting unprecedented challenge with unprecedented cooperation. In the 30s, after the Great Depression, and during World War Two, under the great unifier, Sir Winston Churchill. We need that spirit again and we need it now.”
He will also urge political leaders across Europe to “step up” up to the challenge of finding an agreement.
©2017 Bloomberg L.P.