There are only so many ways U.K. business chiefs can express their dismay at the Brexit deadlock engulfing the country.
Frustration at politicians has morphed into outright anger in the three years since the referendum on leaving the European Union as companies lose customers, delay investments and stockpile goods. “It’s not that the Brexit uncertainty and fear of no deal is going to have an impact in the future, it’s having it right now,” said Carolyn Fairbairn, director general of the Confederation of British Industry, the U.K.’s biggest business group.
Over the past eight weeks, Bloomberg interviewed the chiefs of the U.K.’s five main corporate lobby groups. The interviews were spread over a turbulent period in which the political context changed dramatically. All of them have met weekly with Business Secretary Greg Clark, and at least twice a year with the premier — yet none are happy at the way Brexit is progressing.
MakeUK Chief Executive Officer Stephen Phipson said he saw “no good news” when he spoke to Bloomberg on April 17, after the U.K. had just secured a second Brexit delay, and May still harbored hopes of getting her divorce deal through Parliament. By the time Bloomberg interviewed Fairbairn on June 12, May had resigned as Conservative leader and the race to succeed her was in full swing.
In between, Edwin Morgan at the Institute of Directors warned companies and politicians were underestimating the risk of a no-deal Brexit, and Adam Marshall, director-general of the British Chambers of Commerce, spoke of the anger directed at Westminster. On May 21, just days before May announced her decision to step down, Federation of Small Businesses National Chairman Mike Cherry said firms were braced for more confusion once she’d gone.
Below are some of their observations on Brexit:
They were unanimous in their opposition to leaving the EU without a deal. Even using the threat to bolster the U.K.’s negotiating stance with the bloc lacks credibility, according to Fairbairn, who said it was like telling the EU: “If you don’t do what I want, I’ll shoot my foot off.” Marshall said the “vast majority” of companies don’t want no-deal; Morgan warned it could happen “by accident” and businesses aren’t ready for it.
Stockpiling has added to companies’ costs, and the uncertainty has driven some European customers to abandon British firms, according to Phipson. Marshall said exporters and importers have had to hire logistics experts to help mitigate any post-Brexit border holdups. According to Fairbairn, the biggest hit from a no-deal Brexit will be the decline of U.K. competitiveness.
“There’s just nothing going on” in terms of corporate investment, said Phipson, noting that non-critical spending on training, conferences and advertising has dried up. Cherry cited a mattress company unable to invest in growing because of cash spent on stockpiling. Morgan said many companies, reluctant to incur the expense of preparing for a no-deal Brexit again after doing so in March, will therefore be less prepared for the new Oct. 31 deadline.
All five industry leaders were clear in their discontent. Cherry said frustration at the impasse had turned to anger for many businesses; Marshall said that’s directed across the political spectrum. And Fairbairn said the Tory contest to succeed May isn’t promising any better, with candidates not showing they appreciate the “real challenge to business” and the need to resolve it.
- Threat of No-Deal Brexit Isn’t Likely to Win EU Concessions: UK Business Chief
- UK Business Group Warns Next Tory Party Leader to Avoid No-Deal Brexit
- UK Risk Managers List Brand Damage, Brexit, Cyber Attacks as Top 3 Business Risks
Was this article valuable?
Here are more articles you may enjoy.