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Brexit deal defeat provokes anger from business leaders

British business groups and companies have reacted with anger, after prime minister Theresa May’s proposed Brexit deal was overwhelmingly rejected by parliament last night.

The deal was rejected by 230 votes: the largest defeat in history for a sitting government.

Sky News has reported that bosses from the UK’s biggest businesses, including Amazon and Tesco, took part in an emergency conference call with cabinet ministers on Tuesday night after the result of the vote was announced.

During the call with chancellor Philip Hammond and Brexit secretary Stephen Barclay business leaders are said to have reacted angrily to the government’s refusal to rule out a no-deal Brexit, and stressed that the continuing uncertainty was damaging the UK economy.

John Allan, chairman of Tesco and president of the CBI said the cabinet was communicating “conflicting messages” during an already uncertain time for businesses.

Elsewhere, business groups have been quick to voice their frustration with the ongoing uncertainty resulting from the vote – flagging the negative impacts that would result from a no-deal scenario.

Helen Dickinson, chief executive of the British Retail Consortium, called the result a “cause for serious concern”, and said the time for parliamentary game playing is over: “British businesses desperately need certainty about the UK’s future trading relationship with the European Union and will be severely disadvantaged by a no-deal.” 

“This really is crunch time, and politicians must come together around a workable solution that safeguards consumers from the costs and disruptions of new constraints on the tariff-free and frictionless trade we currently enjoy with partners in the EU.”

A spokesman for the British Fashion Council (BFC) echoed these concerns: “The ongoing uncertainty and confusion that a no-deal creates will have a negative impact on our industry, where investment is already impacted from the uncertainty being faced.

“A no-deal situation will result in no transition period, and with an industry that is predominantly SMEs [small and medium-sized enterprises], we would struggle to cope with the trade realities that it would bring.”

Adam Marshall, director-general of the British Chamber of Commerce, stressed the importance of avoiding leaving the EU with no deal: “Basic questions on real-world operational issues remain unanswered and firms now find themselves facing the unwelcome prospect of a messy and disorderly exit from the EU,” he commented.

“The overriding priority for both government and Parliament must now be to avoid the clear danger that a ‘no deal’ exit on the 29th of March would pose to businesses and communities across the UK”

Stephen Martin, director of the General Institute of Directors, also stressed the need for clarity: “We are nearly two months out from leaving the EU, and firms still do not know basic information such as the processes they would need to comply with for day one of no-deal. This alone makes letting the uncertainty carry on simply unacceptable.”

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Readers' comments (4)

  • The government hasn't apologised for the postponement of the original vote in December. The delay only made hardened people's potions and has resulted in less time to get this sorted. Highly irresponsible.

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  • darren hoggett

    Business should have been preparing for 'No Deal' for some time, even if it doesn't happen. It was clear since the referendum that the majority of MP's do not want to adhere to the will of the people, but the factions that exist cannot possible agree on anything else, therefore the latest farce is of little surprise.

    'No Deal' is hardly the end of the world, it might help get the Industry back on track in the longer term. Plus many leave voters did not vote for business reasons, so businesses must be good enough for the consequences. It's not all about them.

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  • Darren - I'm extremely interested to hear how a No Deal scenario will, in your own words, "get the industry back on track".

    Also, I'm not sure business should've been preparing for a No Deal Brexit when the rhetoric over the last 2 and a half years has been about getting a deal from the EU. A deal which would have been "the easiest in history" according to our very own International Trade Secretary.

    Because you own a small menswear clothing business in Norwich, I don't think you are in a position to speak for the UK business sector as a whole.

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  • darren hoggett

    @anonymous.

    Only a complete fool would have believed the rhetoric that some politicians on both sides came out with. You certainly could not run a business around it. But the single one thing was clear is that the majority of MP's did not want BREXIT, so therefore 'No-Deal' was a significant possibility due to no consensus at Westminster and should have been planned for by larger organisations who would be significantly affected by 'No Deal'. One of our Brand Partners has had a BREXIT committee for over a year, looking and planning for the possibilities. They know what they are doing. But how many others?

    All we ever hear is a myriad of excuses about why nearly everyone is doing so badly or should be doing better. Year after year after year. Bad businesses can hide their flaws when things are good, but rarely when things are bad. The whole Industry needs a shake up to get rid of the dead wood, corporate gravy train and hangers on to make it run successfully and profitable. 'No Deal' could do exactly that.

    Finally I don't and never have claimed to speak for the Industry but then neither does the CBI.

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