Business fears are mounting over this Brexit uncertainty

While the Conservative manifesto told us nothing new about the Government’s Brexit plans, other than repeating the promise of a “smooth, orderly” withdrawal, scarcely a day now goes by without further signs of how difficult this may be to achieve.

On Wednesday, Angela Merkel told a G20 trade union conference that it would be up to the British to work for a settlement that would cause “the fewest possible distortions” to trade. But this followed a startling report from the international body representing all those firms whose products are dependent on components imported from other countries.

A survey of more than 2,000 UK and European supply chain managers by the Chartered Institute of Procurement and Supply found that, thanks to our decision to leave the single market, almost half the European firms reliant on British suppliers are so fearful of the new “customs procedures and regulatory hurdles” this will bring that they are already arranging to source those products on the continent. Of British firms reliant on parts imported from Europe, 32 per cent are likewise looking for alternative suppliers in the UK (of all cars made in Britain only 41 per cent of their components are currently sourced in the UK).

As the institute’s president put it, “the separation of Britain from Europe is well under way”. This is equally true of the City of London, where many international banks, such as JP Morgan, are quietly making preparations to move part of their operations to the continent.

But businesses have only been waking up to all these potential problems since January, when Theresa May announced the reversal of her earlier insistence that Britain would remain “within” the European market. By choosing instead to leave it altogether, we were opting to become what EU rules classify as “a third country”, thus making inevitable all those new “customs procedures and regulatory hurdles” which so many businesses in Britain and Europe are now contemplating with such concern.

This is why we learnt last week from the Frankfurter Allgemeine of a warning from the council of advisers to Germany’s economics ministry that there is “little chance of a sufficiently deep agreement being concluded by the planned exit date of 2019”. The only way to “minimise disruption”, they say, would be for Britain to join Norway in the European Free Trade Area, which Mrs May has ruled out.

In Ireland the sharpest cry of alarm yet went up last week from its racing industry, worth £1 billion a year, which depends heavily on its freedom to move 200 horses a week to race in Britain and back again. Its spokeswoman recalled that last year Cheltenham had 19 Irish-trained winners, along with a third of those at Royal Ascot. She fears that new controls requiring “valuable horses to remain in horse boxes for prolonged periods at border checkpoints” would, on welfare grounds alone, make it difficult for this to continue. But Britain, she said, has so far shown no sign of needing to address this problem at all.

Much of all this concern has only arisen, of course, because of the huge cloud of uncertainty over what Britain will actually be seeking when the talks begin in Brussels next month. It is one thing to offer bland assurances that we are hoping for a “smooth, orderly” withdrawal. But for many the strain of waiting for the details on which their livelihoods depend is becoming hard to bear.