‘Business is ready to live with it, improve it, and above all move on from it’
What does business really make of the Brexit deal? The answer is actually very clear. This deal is not perfect. It does not guarantee a good future trade deal. It contains a tricky backstop no one likes. But, after two years of crippling uncertainty, the majority of British companies share one view: they support it, for three main reasons.
First, it reduces short-term uncertainty. The withdrawal agreement unlocks a 21-month transition period that removes the risk of no deal. No one should underestimate the value of this. These are dangerous and damaging times for the UK economy. Investment has been cut or postponed at 80 per cent of British companies.
The longer no deal remains possible, the more corrosive the impact on jobs and investment. Preventing it would be a breakthrough. Avoiding no deal will also help protect peace and prosperity on the island of Ireland.
For smaller employers, the situation is even more urgent. They have neither the time nor the resources to invest in gaming the many possible Brexit outcomes that might affect them. This matters because 99.3 per cent of private sector employers have fewer than 50 staff; they account for nearly 60 per cent of private sector jobs and 40 per cent of turnover.
Some argue that business should not fear a no-deal outcome because parliament will vote it down. This reassurance meets with a sceptical shrug from most of the businesspeople I speak to. With no House of Commons majority for any route forward, an accidental no deal is still possible – so companies are progressing with their Plan Bs. By Christmas, 97 per cent of companies with contingency plans will have advanced them – stockpiling, moving jobs out of the UK, shifting supply chains.
The second reason to back the agreement is that it opens up a route to a good future trade deal. Let’s be clear – it is not yet a good trade deal. Frictionless trade, ambitious access for services, a say over future rules – all are features that business wants. None is yet guaranteed. This is the basis of a decent trade deal.
For understandable reasons, the backstop is deeply unpopular. It is not the right place to end up. Both sides agree on this. In meetings the CBI has had with EU business leaders, all agree that the sooner a new trade deal is negotiated the better.
Third, this is currently the only viable option for getting beyond Brexit. Moving on is desperately important. The robotics revolution, tackling deep-seated regional inequalities across the UK and our productivity challenge are all forces that will shape our nation’s future.
Should circumstances change, the CBI will measure any new option by the yardstick of what’s best for the economy. But the date for the Commons vote is now set. We are asking MPs to speak to their local employers. This deal is a compromise.
But business is ready to live with it, improve it, and above all move on from it to create the best possible opportunities for the next generation.