Business ‘verging on despair over vote’
CBI chief warns of effects on companies of no deal
THE BOSS of Britain’s biggest business organisation has said business is “verging on despair” after Theresa May’s Withdrawal Agreement was voted down by MPs.
Carolyn Fairbairn, director-general of the CBI, told The Yorkshire Post that a “reckless” no-deal Brexit would be “extraordinarily challenging” for most British businesses.
When asked about how CBI members feel about Brexit, she said: “I think the honest turn of phrase would be verging on despair, actually.
“It is unbelievable to them that here we are, 16 days from the date of leaving the European Union with no more clarity than we had on June 24, 2016. That is shocking. They regard it as a failure of political leadership, but they are also practical and the vast majority of businesses, 60 per cent, have implemented contingency plans for a no-deal. Having said that, only 4 per cent feel they are fully prepared because you can’t be,” she said.
“The business community is despairing, frustrated, incredulous, but practical, and getting on with it.”
Talking about the dangers of a no-deal Brexit, Ms Fairbairn said CBI members can see “absolutely no advantages at all” of WTO rules.
“WTO terms are the most rudimentary trade terms in the entire world. There is no country in the world that trades on WTO terms alone. We would be joining a club of one,” she said.
“The frictions that would be created in our trading system are unconscionable really. Ninety per cent of our exports would face tariffs. We would be introducing customs checks at borders, five times the volume of customs checks compared with now. Our systems are not ready.
“So WTO terms – I’ve used the term reckless for people who have tried to say that it would be easy. There is not a shred of evidence from anybody that this would be anything other than an extraordinarily challenging thing for the majority of British businesses.”
Ms Fairbairn said MPs must now compromise.
“That means a revisiting of red lines. Having looked at all the analysis, the benefits of a customs union for the UK significantly outweigh the costs.”
Asked what CBI members want to see now, she said CBI members will prefer a delay to no-deal.
“That is absolutely categoric, but they would like that delay to be as short as possible – as long as necessary, but as short as possible,” she said.
“Every week of delay is another week of cost if you are a business that is having to create buffer stocks or hire new warehousing. There has to be a plan.”
Asked for her take on calls for a People’s Vote, she said: “The People’s Vote opens up another long period of serious uncertainty.
“Having said that, if it becomes the only way of breaking the gridlock, the only way of getting out of this interminable lack of decision, then business would engage with it.”
There is no country in the world that trades on WTO terms alone. Carolyn Fairbairn, director-general of the CBI.