Top UK business groups have launched a stinging attack on politicians for talking up a no-deal Brexit, warning it is already causing job losses.
Four major bodies representing millions of British firms united in delivering a stark message on Wednesday to the Tory leadership hopefuls prepared to leave the EU without a deal.
Business leaders sounded the alarm just hours before frontrunner Boris Johnson refused to rule out no-deal Brexit as he formally unveiled his bid to be the next prime minister.
One manufacturing chief told MPs at a hearing of Westminster’s Brexit select committee that a no-deal Brexit would “consign a generation of highly skilled workers to the scrapheap.”
Representatives for manufacturing, car, farming and food and drink firms all sounded the alarm when pressed by committee chair Hilary Benn for their message as Tory leadership rivals compete to sound the most pro-Brexit.
Several leading candidates have said Britain will leave with or without a deal on 31 October, sparking even fellow Tory MPs to warn against “fetishizing” the exit date.
Manufacturers: ‘An act of economic vandalism’
Seamus Nevin, chief economist at the manufacturing body Make UK, said: “There is a direct link between politicians talking up the prospect of no-deal and British firms losing customers overseas and British people losing jobs.
“We’re very much aware of a very significant number of job loses in our sector already as a direct result of brexit. We’re aware of further job losses to come.
“Our members are quite blunt and very clear. They say a no-deal Brexit would be nothing short of an act of economic vandalism. It would undo 25 years of economic progress and consign a generation of highly skilled owrkers to the scrapheap.”
He warned investment in Britain had already been paralysed, with stockpiling reaching a record level in the G7 in April and firms in countries as far away as Korea looking to shift business out of the UK.
Carmakers: ‘Threat alone of no-deal is extremely costly’
Sydney Nash, senior policy manager at the Society of Motor Manufacturers and Traders (SMMT), said: “Hearing politicians promote the idea of no deal doesn’t fill our members with any confidence whatsoever, and nor does it fill international investors with confidence either.
“Our appeal to MPs would be to understand what the cost of just the threat of no deal is. The fact it’s promoted as an option is extremely costly to the sector. No deal contingency planning is costing tens of millions of pounds and thousands of working hours.”
He said the end of free movement of goods would “undermine our competitiveness and our ability to manufacture at a competitive level with the rest of the EU.”
“For automotives, no-deal simply isn’t an option. The tariff cost would be a 10% tariff on a finished vehicle. That would cost the sector an additional £4.5bn in imports and exports,” he added.
Food and drink firms: ‘Half of firms would sack workers’
Tim Rycroft, chief operating officer at the Food And Drink Federation, told MPs a no-deal Brexit was the single issue on which its member firms were “most unanimous.”
He said 45% of food and drink member firms said a no-deal Brexit would result in redundancies.
“Food and drink is part of our national security infrasturcture. In event of a no-deal Brexit, exporters would face prohibitively high WTO tariffs and sanitary checks at the EU border.
“We would find ourselves out of regulatory alignment with the mechanisms which have kept our food and drink so safe and high-quality over the past 40 years.”
Farmers: ‘No-deal could be disastrous’
Nick Van Westenholz, director of EU exit and international trade at the National Farmers' Union, said: “It is frankly worrying that we see it being put forward as a plausible scenario to leave without a eal in October by policymakers and our leaders.”
“We have a very closely integrated relationship with the EU on agri-food products. Around two-thirds of our exports go to the EU.
“So any significant disruption to that free and auge itm firinctionless trading wud have huge impact on farming sector. We’ve been v clear that no deal could be disastrous partic in some sectors such as the sheeep sector where sth over 30% of pour production is exported almost all of it to the EU. so no deal wud indeed b v worrying.