Mandatory Credit: Photo by ANDY RAIN/EPA-EFE/REX/Shutterstock (9983923f) Director General of the Confederation of British Industry (CBI) Carolyn Fairbairn speaks at the annual CBI Conference in London, Britain, 19 November 2018. Reports state that guest speaker British Prime Minister Theresa May is to tell business leaders in her speech that her Brexit deal with the EU will allow Britain to take back control of its borders. Prime Minister Theresa May delivers speech at CBI Conference, London, United Kingdom - 19 Nov 2018
Carolyn Fairbairn: 'The never-ending parliamentary process limps on while the economic impact of no-deal planning accelerates'

British business leaders on Wednesday welcomed parliament’s vote to reject a no-deal Brexit, but said the continued failure to agree a withdrawal treaty marked “another deeply frustrating day” for the UK’s employers.

During votes in the House of Commons on Theresa May’s Brexit plan B on Tuesday, MPs supported an amendment tabled by former Conservative minister Caroline Spelman expressing disapproval of a no-deal Brexit.

The votes followed MPs’ emphatic rejection of Mrs May’s withdrawal agreement earlier this month, mainly because of Eurosceptic Conservatives’ objections to a so-called backstop plan to prevent the return to a hard Irish border.

Mrs May is now planning to go to Brussels to seek a rewrite of the draft Brexit treaty, notably on the provisions about the Irish backstop.

Carolyn Fairbairn, director-general of the CBI business lobby group, welcomed MPs’ backing for Ms Spelman’s amendment, which is not binding on the government.

But Ms Fairbairn said another amendment tabled by senior Tory backbencher Graham Brady and backed by MPs — to replace the Irish backstop with “alternative arrangements” — felt like a “throw of the dice”.

“The never-ending parliamentary process limps on while the economic impact of no-deal planning accelerates,” she added.

Last week, Mrs May held a conference call with business representatives at which she “adamantly refused to take no-deal off the table”, according to people who participated.

On Wednesday, Downing Street continued to maintain this stance, despite MPs having rejected a no-deal Brexit by supporting Ms Spelman’s amendment.

A spokesperson said: “The prime minister has always been clear that the best way to avoid no-deal is to vote for the deal and, as before, she urged business leaders to continue to encourage MPs to back the deal, which protects jobs and vital, just-in-time supply chains.”

Stephen Phipson, chief executive of the EEF, the manufacturers’ representative body, thanked parliament for “having the courage” to reject a no-deal Brexit, but said Mrs May now “needs to confirm that she will uphold that position”.

Mr Phipson said the EEF continued to support Mrs May’s original Brexit deal negotiated with the EU, because it retained frictionless trade, zero tariffs, regulatory alignment with the bloc and a sensible transition period — “the outcomes our sector needs”.

But he added that Tuesday’s events left manufacturing businesses “in despair” and put Britain in a “ridiculous position”.

Mike Cherry, chair of the Federation of Small Businesses, said rejecting the backstop and trying to reopen negotiations with the EU on the withdrawal agreement — notably in relation to the backstop — was “a big risk so late in the game with no guarantee that the tactic will succeed”.

Adam Marshall, director-general of the British Chambers of Commerce, said the “real-world” result of the “interminable wrangling” in Westminster was “market uncertainty, stockpiling, and the diversion of staff, money and investment”.

“For every big-ticket business announcing high-profile Brexit-related decisions, there are many more quietly making the changes they need in order to safeguard their operations in the event of a disorderly Brexit,” he added.

“The net result of this displacement activity and uncertainty is slow but very real damage to the UK economy.”

John McGrane, director-general of the British Irish Chamber of Commerce, said: “Businesses across both islands continue to operate without any clarity and in fear of a no-deal Brexit, with many now implementing contingency plans that are a large drain on time and money.”

Catherine McGuinness, policy chair at the City of London Corporation, said she welcomed the “signal of intent” given by the MPs’ vote to reject a no-deal Brexit, but added it was “vital” for firms to lock in a legally binding transition period.

Get alerts on Brexit when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article