UK companies are at “breaking point” over Brexit, and are delaying spending decisions 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.
The comments from the British Chambers of Commerce follow warnings last month from Airbus SE and BMW AG that they may cut UK investment, which prompted angry reactions from some government ministers. Bank of England Governor Mark Carney has also highlighted the issue, saying Brexit has prevented what would otherwise have been a surge in investment.
Confidence and investment intentions will continue to deteriorate until Prime Minister Theresa May delivers “urgent clarity on the practical, detailed issues that underpin trade,” the BCC said.
The UK government has made “limited progress” on just two of 23 issues where business seeks answers, ranging from mobile-phone roaming arrangements to customs and tariffs, it said.
“With the time running out ahead of the UK’s exit from the EU, business patience is reaching breaking point,” Director General Adam Marshall said. “We are little closer to the answers businesses need than we were the day after the referendum.”
The intervention is the latest sign that UK Plc is no longer prepared to give May time to bridge the divisions in her divided Conservative Party over Brexit. More than two years after the Brexit referendum, she’s yet to present a detailed plan because she can’t reach consensus among her ministers.
Parliament’s Treasury Committee, chaired by anti-Brexit Conservative lawmaker Nicky Morgan, has asked the BOE and the UK Treasury to publish assessments on the economic impact of the divorce before Parliament votes on the exit deal.
That vote, expected toward the end of this year or in early 2019, will be a moment of high drama as lawmakers decide whether to back the accord that May brings back from Brussels or try to force the government onto an alternative course.
While Brexit is a constant topic in business surveys, Airbus and BMW were the first major companies to break cover and spell out the full implications of the lack of clarity on Brexit. That led to criticism from ministers including Foreign Secretary Boris Johnson and Health Secretary Jeremy Hunt that the companies shouldn’t air their grievances publicly. Hunt called Airbus’s warning “completely inappropriate,” while Johnson was cited in the UK 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,” Marshall said.
In an apparent effort to mend relations, Brexit Secretary David Davis has invited executives to his country retreat on July 20, Sky News reported. By then the government is due to have published its Brexit plan, and he’ll face plenty of questions.
The BCC listed 23 areas in which it’s seeking clarity. On two, it said there was "limited" progress: the access companies will have to the EU workforce, 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 UK 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.* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER