LATEST FINANCIAL NEWS
UK Plc counts cost of Brexit as politicians ‘chase rainbows’
As the cost of the Brexit turmoil mounts for British companies, business leaders are fed up with the UK’s political class. And with Prime Minister Theresa May’s tenure coming to an end, they worry about the alternatives.
“The anger is directed at Westminster as a whole,” Adam Marshall, director general of the British Chambers of Commerce said in an interview.
“There are concerns about lots of individuals and lots of political parties right now,” he said.
UK companies have already had to adjust to two delays to Brexit day, which has been postponed to October 31. Now May has agreed to put a date on her departure, they face months of more drama as the governing party elects a new leader who will likely redefine the course of Brexit.
Politicians are “chasing rainbows,” and businesses “are paying for political indecision,” Marshall said.
Meanwhile, the costs mount, and a lot of businesses face working capital pressures, he said.
Costs include: European customers canceling orders “in large quantities” Stockpiling goods and components in case trade frictions surface Moving stock to and from the continent to ensure products are in the right place when any change materializes Global customers holding off orders because they don’t know what tariffs will apply.
Marshall cited the example of a freight company that had hired logistics experts to deal with the effects of Brexit on March 29 — the original deadline.
“It can’t let those people go now because that scenario could come back in October, and the skills are in such high demand,” he said.
“It’s basically carrying them on the books for six months without them actually having that much to do.”
READ: ‘Fed up’ Hammond insists Brexit referendum must be considered
Marshall spoke before talks between the government and the opposition Labour party collapsed.
The government may move this week to hold non-binding votes in the House of Commons on various Brexit options, before May puts a deal to a vote for a fourth time in early June.
It’s been defeated on three occasions and few expect it to pass this time. After that, May will spell out the timetable for her departure.
Marshall said that for companies, the detail is more important than the packaging of any deal. That includes things like whether the UK remains in a sales-tax bloc with European nations, rules-of-origin on trade, and customs and regulatory checks.
“These are the real-world things that people talk about, and instead all we have is politicians who tell us about the box, not what’s inside it,” he said. His message to politicians? “Stop grandiose statements at 30,000 feet and engage on the practical considerations that matter on the ground.”
Marshall said a no-deal exit remains something the “vast majority” of companies wanted to avoid, but warned there’s a “real worry” it could happen by accident.
The turmoil has placed companies in an almost impossible position: They have to plan for the future when there are any number of different models for Brexit that could prevail.
“Absolutely nothing has changed in months: businesses still face the same level of uncertainty now that they did three, six, nine, 12, 15, 18 months ago, because there is no clear path forward,” Marshall said.
“People are watching to see whether this plane can make a controlled landing at the airport.”