British Business has found its bite and bark on Brexit
4 min read
It is economic self-harm which can be avoided if only the Tories step outside of their psycho-drama echo chamber and hear the legitimate concerns of British business, says Seema Malhotra MP.
There have been grey clouds circling for months, but now the torrential downpour has come on the government’s Brexit negotiation strategy. After the final compromise dragged out from the government on the Grieve II Amendment for the ‘meaningful vote’ last week, and the clear signs that this is government lurching from internal crisis to crisis, business is now finding its voice on Brexit. And it is in our national interest that they do so.
Last week Airbus opened the floodgates by publishing a risk assessment on the outcomes of Brexit for their company, stating that it would leave in the case of a no deal. Airbus directly employs 14,000 people in the UK and are willing to move those jobs abroad if the UK cannot secure a similar deal on customs and trade to the benefits we have now inside the EU. They are not scaremongering. This is real.
The CBI warned that British car industry could face “extinction” if the UK was taken out of the Customs Union. The SSMT figures this week showed that car industry investment was down yet again. In 2015 it was at £2.5bn and fell to £1.6bn and £1.1bn in 2015/16 with it currently at as low as £0.347bn.
On the very same morning BMW chief, Stephan Freismuth, said Brexit posed a threat to the 8,000 employees and main sites in the UK due to delays at the border, “at the end of the day the supply chain will have a stop at the border, and then we cannot produce our products in the UK.”
The government have kept businesses continually in the dark about planning and what to expect post-Brexit. Mike Hawes, chief executive of SMMT, said “There is no credible ‘plan B’ for frictionless customs arrangements.”
Eurotunnel director John Keefe also highlighted the government’s lack of details, “we know absolutely nothing from the government about what Day 1 No Deal would look like, we can’t build infrastructure, can’t recruit people, cant specify systems. We can’t construct anything.”
You would have expected this to have shaken reality into some Brexiteers, but it led the Foreign Secretary saying “F**k business” over the weekend. Boris Johnson is the UK’s most senior diplomat and it is disgraceful he disregards business concern over Brexit with such disdain. This behaviour is not befitting for a great office of state, especially given he is the man who promised in 2016 that Brexit would be better for British businesses.
Even foreign businesses are making moves. Bank of America began to move part of its investment banking operations to Paris in preparation for Brexit. A UBS survey of 600 companies highlighted that 35% of companies plan to reduce UK investment post-Brexit, with 41% plan to move a large amount of capacity out of UK, and finally 42% where planning to move capacity to the Eurozone.
Yesterday, the Department for Trade’s own figures showed that Foreign Direct Investment was down by a staggering 9% over the last year, a drop for the first time in five years.
All the evidence is showing that there will be huge costs to incur just to replicate what we currently do through the EU systems. Research by CER staggeringly outlined that since the referendum Brexit is now costing the public finances by £440 million a week with the economy 2.1% weaker.
While the European Commission set out potential WTO trade rules for the EU-UK future trade arrangement, the Government cannot even agree between themselves as to actually what it wants two years on from the referendum. The Brexit White Paper rumoured to be published on Monday 9th July will need to do as much.
The warning signs have been there for all to see, but it is now time for Theresa May to listen before the economic landslide continues on wealth and job creation in the UK. People voted to come out. They didn’t vote to lose out.
The Government’s ostrich-esque policy of sticking its head in the sand does not serve the best interests of its people. It is economic self-harm which can be avoided if only the Tories step outside of their psycho-drama echo chamber and hear the legitimate concerns of British business.
Seema Malhotra is Labour and Co-Operative MP for Feltham and Heston.
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