Brexit: UK's five top business groups 'watching in horror' as politicians' squabbling edges no-deal closer

‘With just 100 days to go, the suggestion that no deal can be “managed” is not credible’

UK businesses are “watching in horror” as bickering politicians bring the country ever closer to no-deal Brexit, Britain’s five major industry groups have warned.

Companies are holding back investments intended to create jobs or raise pay and productivity in favour of contingency planning, the associations told the government, but they made clear they believed time had run out to mitigate the “severe dislocation” crashing out of the EU would bring.

The British Chambers of Commerce, EEF, CBI, Federation of Small Businesses and the Institute of Directors are fed up of politicians’ internecine squabbles, they said in a joint statement after Theresa May announced she would significantly ramp up preparations for a situation in which the UK crashed out of the EU without an agreement in place.

It read: “Businesses have been watching in horror as politicians have focused on factional disputes rather than practical steps that business needs to move forward.

“The lack of progress in Westminster means that the risk of a no-deal Brexit is rising. With just 100 days to go, the suggestion that no deal can be ‘managed’ is not a credible proposition.”

Some Brexiteers, including international development secretary Penny Mordaunt, have advanced the idea of a “managed” no-deal exit – but her cabinet colleagues described it as a “unicorn” plan. Guy Verhofstadt, the European Parliament’s Brexit coordinator, tweeted on Tuesday that “there is no such thing as a ‘managed no-deal’”.

The business groups’ statement, released overnight, came as ministers stepped up their £2bn contingency plans for a no-deal scenario including placing 3,500 military personnel on standby to support the government.

After Ms May was forced to delay the meaningful vote on her withdrawal agreement until mid-January her cabinet agreed on Tuesday that no-deal planning should proceed ”in full”. Officials will now implement previously-announced policies like medicine and food stockpiling, and attempt to communicate with six million British businesses to urge them to make their own contingency arrangements.

But the five groups added in their joint statement: “Businesses would face massive new customs costs and tariffs [under no deal]. Disruption at ports could destroy carefully built supply chains.

“From broadcasters, to insurance brokers, to our financial services, the UK’s world-leading services sector will be needlessly disadvantaged, and many professional qualifications will be unrecognised across the EU.

“UK and EU nationals working abroad will be left in deep uncertainty about their future.

“As a result of the lack of progress, the government is understandably now in a place where it must step up no-deal planning, but it is clear there is simply not enough time to prevent severe dislocation and disruption in just 100 days.”

Approached for comment, the Department for Business, Energy and Industrial Strategy referred The Independent to the words of Ms May’s spokesman yesterday.

He said the government continued to believe that Brexit under the terms of the deal struck by Ms May in Brussels remained ”the most likely scenario” and that cabinet had agreed it was “our best no-deal mitigation”.

However, he added: “We will now set in motion the remaining elements of our no-deal plans.

“Cabinet also agreed to recommend to businesses and ensure they are similarly prepared, enacting their own no-deal plans as they judge necessary.

“Citizens should also prepare in line with the technical notices issued in the summer and in line with further more detailed advice that will now be issued over coming weeks.”

Additional reporting by PA