Most UK firms to trigger Brexit safety plans ‘by Christmas’
Toyota chief urges UK, EU to avoid no-deal Brexit ‘at all costs’
LONDON, Oct 21, (Agencies): The vast majority of British firms are poised to implement their Brexit contingency plans by Christmas if there isn’t greater clarity over the country’s exit from the European Union, a leading business group warned Sunday.
The Confederation of British Industry said these plans could include cutting jobs, adjusting supply chains outside the UK, stockpiling goods and relocating production and services overseas.
The warning comes amid growing fears that Britain may crash out of the EU in March without a deal on the future relationship. That could see tariffs placed on British exports, border checks reinstalled, and restrictions imposed travelers and workers - a potentially toxic combination for businesses.
“The situation is now urgent,” said Carolyn Fairbairn, the CBI’s director general. “The speed of negotiations is being outpaced by the reality firms are facing on the ground.”
Discussions between the two sides have hit an impasse largely over how to maintain an open border between EU member Ireland and Northern Ireland, which is part of the United Kingdom.
A summit of EU leaders last week failed to yield a breakthrough. December is now the next scheduled EU summit, leaving the Brexit process tight ahead of Britain’s official departure date on March 29. Even if a divorce deal is forged, there are doubts over British Prime Minister Theresa May’ ability to secure the necessary majority in Parliament, given bitter divisions on the topic.
“Unless a Withdrawal Agreement is locked down by December, firms will press the button on their contingency plans,” said Fairbairn. “Jobs will be lost and supply chains moved.”
Fairbairn’s warning was based on a survey of 236 member firms tilted toward small and mediumsized companies with up to 500 employees, undertaken from Sept 19 to Oct 8. The survey found that 82 percent of firms will have started to implement contingency plans by December if the Brexit process isn’t any clearer.
A European flag flutters in the breeze as demonstrators pass Trafalgar Square, taking part in a march calling for a People’s Vote on the final Brexit deal, in central London on Oct 20. Britons dreading life outside Europe gathered from all corners of the UK to London on Saturday to try to stop their country’s looming breakup with the EU. (AFP)
The CBI also said that 80 percent of firms say Brexit has already had a negative impact on their investment decisions, more than double the 36 percent recorded a year ago. The survey found that 66 percent of businesses said Brexit has had an impact on the attractiveness of the UK as a place to invest, while 24 percent said there had been no impact.
Some big companies are becoming increasingly vexed by the impasse in the Brexit talks. Last week, ahead of the summit in Brussels, pharmaceuticals giant AstraZeneca and carmaker Ford issued statements raising doubts about their investments in Britain.
“Uncertainty is draining investment from the UK,” said Fairbairn.
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The head of Toyota, who leads a group of Japanese automakers, on Friday urged Britain and the European Union to avoid a no-deal Brexit “at all costs.”
The statement from comes after EU leaders on Thursday warned Britain that they would offer no more concessions to break a deadlock in Brexit negotiations.
“Apprehension is therefore growing that a ‘withdrawal without agreement’ may become a reality,” wrote Toyoda in a rare statement posted on the Japan Automobile Manufacturers Association website.
“We hope that both the UK and EU governments will continue to make maximum efforts to reach a satisfactory settlement and that a ‘withdrawal without agreement’ is avoided at all costs,” he said.
The statement warned that a no-deal Brexit could have disastrous consequences for the industry, including suspended production, declining revenue and rising vehicle prices because of increased logistics and production costs.
Toyoda said Japanese automakers employed 170,000 people throughout the EU, including in Britain, and warned that the firms require “an unimpaired trade environment between the United Kingdom and European Union.”
And he called for “flexible responses” after Britain’s withdrawal to sure businesses can continue to function smoothly during the transition.
European leaders gathered in Brussels this week for Brexit talks but made little progress, with British Prime Minister
only suggesting a longer transition period.
EU leaders have warned that Britain may now crash out of the regional group in March without any agreement.
On Friday, the EU’s chief Brexit negotiator Michel Barnier said the thorny issue of the border between Ireland and the British province of Northern Ireland could sink Brexit negotiations.
“I believe we need a deal. I’m not yet sure we’ll get one. It is difficult, but possible.”