UK firms urge politicians to move swiftly to end state of Brexit limbo

LONDON: In September, Jaguar Land Rover unveiled a new development facility near Coventry in central England, equipped with technologies like 3-D printing and dedicated to a futuristic vision dubbed “Destination Zero”: No emissions, accidents or congestion.

Early next month, Britain’s biggest auto manufacturer plans to add another goose egg: Zero production.

The maker of luxurious Jaguar sedans and rugged Range Rover SUVS is idling its UK factories for a week in order to guard against supply-chain disruption after the Oct 31 deadline for leaving the European Union. The shutdown will go ahead whether the UK departs with a deal, crashes out without one or secures another delay.

After a weekend of political chaos that left Prime Minister Boris Johnson’s withdrawal agreement in tatters, the answer to that question remains as elusive as it was more than three years ago when the country voted to leave. UK Plc is nowhere nearer the clarity it craves.

While most business leaders want to avoid a no-deal departure, continued uncertainty is not much better. With the cliff edge looming, and the prospect of another one in three months if the EU grants Parliament’s request for a further delay, collateral damage is mounting. After Johnson secured an 11th-hour agreement with Brussels last week, industry groups including the Federation of Small Businesses and the British Retail Consortium had allowed themselves a glimmer of hope, urging politicians to move swiftly to end the state of limbo.

The weekend brought a reality check. In a rare Saturday sitting of the House of Commons, lawmakers denied Johnson the chance of putting his deal to the test by voting in favour of an amendment that basically required him to ask the EU for a delay.

Overall, the UK has weathered Brexit better than some had feared. The housing market has cooled but not collapsed. While the economy unexpectedly shrank in August, it’s on track to avoid a recession in the third quarter.

The cost for companies has been steep, though. Carmakers are particularly exposed to the vicissitudes of Brexit because of their just-in-time supply chains. They’ve spent more than £500mil (Us$650mil) to prepare, according to the Society for Motor Manufacturers and Traders.

In London’s financial district, equity issuance has dried up and about 1,000 investment banking jobs have been moved to other European hubs. Banks have also earmarked up to £1 trillion assets to move to the EU, according to consultancy EY, but many have been slow to make the shift.