UK businesses voice concern over shaky Brexit deal
LONDON: Business leaders expressed growing alarm yesterday as a draft Brexit agreement seen as the only chance of preserving some stability in UKEU trading threatened to unravel, sending stock prices and the pound plunging.
Just 12 hours after British Prime Minister Theresa May announced that her Cabinet had agreed to the terms of the draft agreement, Brexit Minister Dominic Raab and Work and Pensions Minister Esther McVey quit, saying they could not support it.
Their departures and those of other, junior, ministers, revived the spectre for business of Britain leaving the European Union without a deal next March, and sent shares in British housebuilders, retailers and banks tumbling.
‘‘The political situation remains uncertain,’’ German car maker BMW said in a statement.
‘‘We must, therefore, continue to prepare for the worstcase scenario, which is what a nodeal Brexit would represent.’’
The European Union is Britain’s biggest trading partner, accounting for 44% of UK exports and 53% of imports to the UK.
After 45 years of membership, industries including defence, cars and aerospace have created intricate supply chains that rely on smooth, ‘‘justintime’’ delivery of thousands of parts across the sea that divides Britain from the Continent.
Business leaders fear that the country could stumble towards a nodeal Brexit where border checks block ports and fracture the supply chains that support the likes of RollsRoyce and BAE Systems.
Karen Betts, the head of the Scotch Whisky Association, said a nodeal Brexit would cause ‘‘considerable difficulties’’ for the industry and increase cost and complexity. It accounts for around 20% of all UK food and drink exports.
A senior executive at one of Britain’s biggest banks said this was the most disastrous government he had ever seen.
‘‘The rest of the world is looking at us and laughing. It is time to have some stability so business can get some certainty. This is what the country needs.’’
Industry bosses who had been briefed on the draft agreement by ministers late on Thursday had broadly welcomed it as the best chance of a compromise that would secure a transition period and avert the chaos of no deal at all.
Mrs May’s office also released statements from a number of major companies such as Diageo, the London Stock Exchange and Royal Mail welcoming the draft deal.
Iain Anderson, executive chairman of public affairs firm Cicero, which represents many finance companies, said although most executives did not like Mrs May’s deal they realised it was now the only game in town.
‘‘‘There is now no time to negotiate another deal. We thought we had stability — now we have instability writ large.’’
The UK chief of German industrial group Siemens, which employs 15,000 people in the UK, reiterated his call to get behind the draft agreement even as senior politicians called for Mrs May to quit. — Reuters