14 June 2019

Bloomberg: No-deal Brexit threat is act of self-harm, business chief says

Threatening to leave the European Union without a deal isn’t likely to win Britain concessions from the bloc, the country’s biggest business group said in a warning to candidates jostling to succeed Prime Minister Theresa May.

“I’ve never felt it was a particularly credible negotiating threat,” Confederation of British Industry Director General Carolyn Fairbairn said in an interview. “Because it was a bit like saying ‘If you don’t do what I want, I’ll shoot my foot off.’ It was something right from the beginning that was so harmful to us.” [...]

Brexit is already exacting a toll on U.K. business in the form of lost orders and customers, a drop-off in investment and increased costs for stockpiling and other no-deal preparations, Fairbairn said. That heightens the urgency to resolve the impasse and move on to other things companies care about, such as improving infrastructure and plugging skills gaps, she told Bloomberg.

“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,” Fairbairn said. “This is a situation of enormous urgency.”

Fairbairn’s comments add to a series of warnings from the U.K.’s top business groups.

Politicians have been ‘chasing rainbows,’ the British Chambers of Commerce said, while the delay to Britain’s split from the EU has meant ‘no good news’ for employers, according to Make UK, the biggest manufacturing lobbyist. The Institute of Directors warned that companies are under-estimating the threat of no-deal and the Federation of Small Businesses said the Tory leadership contest only adds to their confusion.

The fallout from a no-deal split will go beyond the immediate effects, according to Fairbairn. The greater risk is the “long-term impact of losing the ability to trade frictionlessly with our closest market of 500 million people,” she said.

"We’re talking too much about the short-term disruption and the empty shelves and poor availability of lettuces; it almost trivializes it,” Fairbairn said. "For me, the real risk of no-deal is it triggers a serious decline in our competitiveness for the long-term." [...]

Full article on Bloomberg

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