U.K. Businesses at ‘Breaking Point’ Over Lack of Brexit Clarity
U.K. companies are slowing down their investments as they await answers to key questions around Brexit.
(Bloomberg) -- U.K. companies are at “breaking point” over the lack of clarity on Brexit and are slowing down their investments as they await answers to key questions surrounding Britain’s departure from the European Union, one of the country’s main business lobby groups said.
Business confidence and investment intentions will continue to deteriorate until Prime Minister Theresa May ends the bickering in her Cabinet and delivers “urgent clarity on the practical, detailed issues that underpin trade,” the British Chambers of Commerce said. The government has made “limited progress” on just two of 23 issues where business seeks clarity, ranging from mobile-phone roaming arrangements to customs and tariffs, it said.
“With the time running out ahead of the U.K.’s exit from the EU, business patience is reaching breaking point,” BCC Director General Adam Marshall said on Tuesday in a statement. “With less than nine months go to until Brexit day, we are little closer to the answers businesses need than we were the day after the referendum.”
The warning is the latest sign that U.K. Plc is no longer prepared to give May time to bridge the divisions in her Conservative Party over Brexit. More than two years after the referendum, she’s yet to present a detailed plan for the country’s future EU relationship because she can’t reach consensus among her ministers.
‘Inextricably Linked’
On Tuesday morning the Professional Services and Business Council, representing groups including lawyers, accountants and consultants, weighed in, releasing a letter to May which called for a deal that would allow their members to continue to work across the EU as they do now, with free movement and mutual recognition of qualifications. It warned against trying to do separate deals for services and manufacturing, sectors it described as “inextricably linked.”
In Parliament later, Chancellor of the Exchequer Philip Hammond, whose support for maintaining close ties to the EU has made him unpopular with pro-Brexit Tories, acknowledged the need for urgent progress and said the voice of corporate Britain must be heard.
“The views of business, which is the great generator of employment and wealth and prosperity in our country, should always be taken very carefully into account,” he told lawmakers. “We should listen to what business is telling us and make sure that we deliver a Brexit which delivers the needs of business.”
Cabinet Divisions
His comments highlight the tensions within the Cabinet ahead of a crucial meeting on Friday, when May will try to unite her feuding ministers behind a Brexit blueprint.
Last month, first Airbus SE and then BMW AG warned they may pull U.K. investment, the first major companies to break cover and spell out the full implications of the lack of clarity on Brexit. Health Secretary Jeremy Hunt responded by calling Airbus’s warning “completely inappropriate,” while Boris Johnson, the Brexit-supporting foreign secretary, was cited in the U.K. media as saying “f*** business.”
“Businesses have every right to speak out when it is abundantly clear that the practical questions affecting the competitiveness of their firms and the livelihoods of millions of people remain unanswered,” the BCC’s Marshall said.
The business lobby listed 23 areas in which it’s seeking clarity. On two of them, it said there was "limited" progress: the access companies will have to the EU workforce in the future, and industrial standards. On the remainder, it found little or no progress.
Those issues include the ability to make staff transfers across borders, the access U.K. companies and projects will have to European Investment Bank and Horizon 2020 science funding, tax arrangements, rules of origin, tariffs, customs inspections and the border with Ireland.
--With assistance from Robert Hutton and Jessica Shankleman.
To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net
To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Jones Hayden, Peter Chapman
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