Brexit: Business leaders urge MPs to back Theresa May's deal as political turmoil intensifies

'Parliamentarians have got to put aside personal ideologies and definitely career ambitions,' says Iceland boss

Ben Chapman@b_c_chapman
Friday 16 November 2018 17:40
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Business leaders have called on politicians to put aside career ambitions and get behind Theresa May’s Brexit agreement to prevent the UK crashing out of the EU with no deal.

As political turmoil intensified in Westminster and the prime minister attempted to quell a Tory revolt, a number of high-profile figures in the corporate world urged MPs to back the draft agreement.

“We are slightly running out of time and I would, as a business leader, like to see politicians on both sides of the fence get on and negotiate a practical deal that works for business,” said Warren East, chief executive of Rolls-Royce.

“We’re essentially [still] having a discussion we could have had the morning after the referendum,” he told BBC Radio 4’s Today programme.

Any Brexit agreement would be better than no deal at all, he said.

Jürgen Maier, UK chief executive of German engineering giant Siemens expressed similar sentiments. “My gut feeling is we need to get behind it and we need to make this deal work,” he said. “What we need is certainty.”

Richard Walker, managing director of Iceland Foods, said there was “no other option” but for MPs to agree on the draft deal.

“Parliamentarians have got to put aside personal ideologies, and definitely career ambitions, and think very carefully about delivering on the deal we have,” he said.

“Every deal requires concessions on both sides. We voted to leave and this proposal regains as much control as we can expect whilst still keeping us open for business with our biggest trading partner. Moreover, it delivers a clear path ahead that business so desperately needs.”

Business groups welcomed the agreement as progress but the Institute of Directors (IOD) said more detail was needed for firms to assess how they will be impacted.

IOD director general Stephen Martin urged ministers to think “long and hard” about how they react to the first-stage agreement.

“Leaving the EU without a deal is a very bad outcome for businesses, workers and consumers, and this is simply an inherent risk that comes with voting down any withdrawal deal,” he said.

The IOD was “heartened” to see that provision had been made to extend the transition period, Mr Martin said. An extension would help to ensure firms have enough time to adjust to any new changes once the UK’s economic relationship with the EU had been agreed.

But growing unrest in Westminster has made the prospect of the current deal passing through parliament appear remote.

Two cabinet members, Dominic Raab and Esther McVey, resigned on Thursday saying they could not support the draft agreement. By Friday afternoon 21 MPs had publicly submitted letters backing a vote of no confidence in the prime minister.

Helen Dickinson, chief executive of the British Retail Consortium, said the political uncertainty would harm UK consumers.

“Until a withdrawal agreement is approved by both parliament and EU member states, we have continuing uncertainty and the risk remains of consumers facing higher prices and reduced availability of products in March 2019,” she said.

Andrew Gray, head of Brexit at PwC said firms needed to be ready for all eventualities. “We still urge business to continue preparing for both a deal and no deal scenario until the deal is ratified,” he said.

In the markets, the pound’s 2 per cent plunge against the dollar on Thursday indicated that there is little confidence that parliament will approve the deal in its current form.

However, people should expect Theresa May to “fight until her last breath”, said Hussein Sayed, chief market strategist at FXTM.

With a range of options on the table, from a no-confidence vote to a Final Say referendum or hard Brexit, uncertainty is likely to reign, Mr Sayed said.

“All we know is volatility in UK assets will hit the roof in the days and weeks to come.”

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For the wider economy the message from analysts has largely been that Ms May’s deal is better than no deal.

“While the long-term risks to UK potential growth from Brexit loom large, the prospect of a deal presents considerable upside potential for the UK economy over the medium-term,” said Karen Ward, a market strategist at JPMorgan Asset Management.

“Going into next year we expect business investment to experience a relief rally and higher sterling to depress inflation and lift real wages so consumer spending would also accelerate,” she wrote in a research note.

The UK’s startup scene would find it difficult to assess the impact of the latest Brexit upheaval, said Jenny Tooth, chief executive of the UK Business Angels Association.

“While we may be able to gauge the immediate aftermath of Brexit on larger businesses due to falling share prices, it is simply not as easy to evaluate start-ups and scale-ups under the same filter – the majority of which could suffer irreparable damage at the hands of such turbulence.”

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