The head of the UK’s largest business lobby group has warned that a no-deal Brexit could not be “managed” and would have a huge impact on the country’s businesses and economy.
“Make no mistake, no-deal cannot be ‘managed’. And it’s certainly not desirable,” said Carolyn Fairbairn, the CBI’s director-general, in a speech to businesses in Bristol on Friday.
She also warned that the proposals for a future immigration regime published by the government “fall far short” of what the economy requires.
She said the “myth” that businesses turned to foreign labour because they were “too lazy to invest in workers” in the UK had to be confronted, and that “generalisations and stereotypes” hampered honest debate.
“I hear politicians say it who should know better — and pull them up on it every time — because it couldn’t be more wrong,” she said.
The government has initiated a consultation period over its proposals, which Ms Fairbairn said left too little time for companies to react. She added that the proposed immigration charges of over £1,000 per worker per year were unaffordable.
Justin Hawke, who owns Bristol-based brewery Moor Beer which exports a quarter of its production to the EU, said EU citizens he employed were feeling “very uncertain about their futures”, and that his product relied on seamless shipping and quick delivery times.
“Part of our appeal is linked to the reputation the UK enjoys as an open, engaged society that leads in so many sectors, including brewing. This reputation has already taken a dent and will be further eroded by Brexit, particularly if we leave the EU without a deal,” he said.
Ms Fairbairn said that, in the event of a no-deal exit, exporting companies would no longer be able to rely on trade deals that the UK has through the EU, including with Japan, South Korea and Turkey. She warned that “yet more brinkmanship” when MPs vote on the prime minister’s deal next week could result in a “disorderly” departure.
“The responsibility to ensure an orderly exit is now in parliament’s hands [and] each MP is democratically chosen to safeguard the security and prosperity of our country,” said Ms Fairbairn. “If parliament can’t agree then it is for the government immediately to set out what it will do to avert a no-deal exit, and to guarantee this.”
Matt Griffith, director of policy for chamber of commerce Business West, said he had been speaking to many businesses in the region which were “scrambling” to put contingency planning in place for March 30, the day after the UK leaves the EU.
Such plans “are usually far from ideal, cost much-needed investment capital and deliver second-best outcomes for firms’ competitiveness, whether it be relocating logistics, warehousing hubs or new regulatory footholds in the EU”, he said.
“For the south-west our aerospace and advanced manufacturing supply chains are big issues, but also food and drink and creative services firms are all very worried about any cliff-edge Brexit.”
The CBI, in tandem with other business representative groups, has warned consistently of the negative impact that a no-deal scenario would have on British business and the economy and of the increasingly desperate need that companies have for clarity over the country’s future relationship with the EU.
Mr Griffith said that if the government’s deal fell next week, companies were hoping “moderate MPs from across parties can start to work together”.
He added: “There is widespread despair at the lack of sensible compromises and the paucity among parliamentarians of an in-depth understanding of the implications of leaving.”