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Business leaders warn of perils of no-deal Brexit

Alan Jones, PA Industrial Correspondent
·4-min read

Business leaders warned of the impact of leaving the EU without a trade deal on sectors ranging from automotive to food and drink, one warning that the UK was entering “dangerous territory”.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said leaving the EU without a deal would have a “devastating” impact on the motor industry, hitting the economy and jobs in every region of the country.

“Businesses have been battling coronavirus at the same time as investing heavily in decarbonisation, all while preparing as best they can for a seismic change in trading conditions come year end.

“To avoid permanent damage, we urge both sides to keep talking, to remain calm but work with renewed vigour on a deal that supports automotive, a sector that is the UK’s biggest exporter of goods and one of the UK and Europe’s most valuable economic assets.”

Ian Wright, chief executive of the Food and Drink Federation, said: “The Prime Minister’s statement signals that we are heading into very dangerous territory.

“In the event of a no-deal Brexit, shoppers will, literally, pay a heavy price.

“Imported food and drink from the EU will face eye-watering tariffs averaging 18% kick starting price rises.

“At the same time border delays and disruption will bring further costs which will not be subsumed by industry.

A no-deal outcome is bad for food and drink businesses, bad for food security, and bad for every household in Great Britain.”

Dame Carolyn Fairbairn, CBI director general, said: “After four years of negotiations and so many hurdles crossed, this is no time to give up. Neither side can afford to fall at the final fence.

“A deal is the only outcome that protects Covid-hit livelihoods at a time when every job in every country counts.

“Businesses are clear on the benefits of a deal.

“Agreement brings the clarity needed for urgent preparations.

“Maximising customs co-operation will minimise red tape.

“A deal will bolster implementation of the Northern Ireland Protocol and safeguard investment critical for future jobs.”

Mike Cherry, chairman of the Federation of Small Businesses said: “Not only have small firms been hit by the most severe recession on record over the past six months, they’re now 10 weeks out from the end of the transition period with no clear sense of what our future relationship with the EU will look like.

“They’re being told to both prepare and simultaneously manage a fresh set of Covid restrictions.

Cheese in a Whole Foods Market shop in London (Kirsty O'Connor/PA)
Cheese in a Whole Foods Market shop in London (Kirsty O’Connor/PA)

“Many simply don’t have the time or money to make adjustments, even if they want and need to, and they don’t even know what they’re preparing for.

“The Government is essentially saying get ready for a no-deal outcome even though a deal could still happen.”

Allie Renison, from the Institute of Directors, said: “Few would doubt that getting ready for no deal in the middle of a pandemic will be a Herculean task for many businesses.

“To help businesses prepare, Government must work closely with directors to aid their planning, providing information as soon as it comes to light. Financial support for small firms in particular should be stepped up, whether through vouchers or tax reliefs.

“While there may be opportunities on the other side of transition, it remains imperative to minimise the risks in getting there to maximise any future benefits. 

“Both sides must keep their eyes on the prize of a deal, which is in everyone’s best interests.”

Honda cars are lined up at Southampton Docks (Andrew Matthews/PA)
Honda cars are lined up at Southampton Docks (Andrew Matthews/PA)

Len McCluskey, general secretary of Unite, said: “From car and pharmaceutical production to food processing and warehouse distribution, working people need a deal that keeps our country moving, our shops filled.

“An Australian-style deal is not that deal.

“The Prime Minister must stop playing politics with people’s jobs and lives. No deal will be a disaster for an economy already suffering deep harm due to the pandemic.”

John Phillips, GMB acting general secretary, said: “We are right in the middle of a pandemic, with hundreds of thousands of people losing their jobs and industries right on the brink of destruction.

“Yet ministers still want to impose a devastating No Deal Brexit.

“After four years of chaos and the broken promises of an ‘oven-ready deal’ this incompetent Government – which has so spectacularly mishandled the Covid crisis – just can’t be trusted to save people’s livelihoods.

“We will all end up paying the price for their utter negligence.”