IT would be difficult to overstate businesses’ degree of exasperation over continuing huge uncertainty around Brexit, little more than two months before the scheduled date, and their genuine fear of a no-deal departure, after MPs voted down the UK Government’s draft withdrawal agreement.
The mood of businesses, which became clear in the immediate wake of Tuesday night’s vote as responses flooded into the email inbox, was at odds with celebratory scenes outside the House of Commons as people favouring staying in the European Union welcomed the humiliating defeat for Theresa May’s deal.
That said, the die-hard Brexiters appeared to be doing their best to try to cheer more loudly than the Remainers. For this ideologically driven band, the Prime Minister’s deal did not offer an extreme enough exit. This faction continues to want the hardest possible exit from the EU.
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The arch-Brexiters either do not care about, or do not want to listen to, the realities of what such a departure would involve, in terms of the likelihood of deep recession and a surge in unemployment, as well as huge damage to already under-pressure living standards. Perhaps they believe that Britain’s history, with which they seem most enthused, will magically protect it from all of these current-day issues?
So there was something for both camps in the vote.
For those who see the folly of leaving the EU, it raised hopes that maybe, just maybe, Brexit would not happen at all.
Meanwhile, at least some of the entrenched Brexiters appeared to be lapping up the prospect of a Great British cliff-edge Brexit, whatever the damage. Maybe, in their minds, you do not need a strong economy if you have a stiff upper lip and a bulldog spirit, to fight self-inflicted adversity.
The fact that the pound held up relatively well in the wake of the colossal defeat for Mrs May might give the Remainers some comfort, with financial markets signalling a view that this camp has more to celebrate in Parliament’s rejection of the draft withdrawal agreement.
The business community was not sharing in the elation seen outside Parliament, although the Food and Drink Federation did raise the happy option of a second referendum.
Carolyn Fairbairn, director-general of the Confederation of British Industry, said: “Every business will feel no-deal is hurtling closer. A new plan is needed immediately. All MPs need to reflect on the need for compromise and to act at speed to protect the UK’s economy.”
Liz Cameron, chief executive of Scottish Chambers of Commerce, declared in the wake of Tuesday’s vote: “With just over 70 days to go until the UK exits the EU, business communities will be left even more frustrated at the relentless saga of Westminster politics. As a result of [the] vote, companies find themselves facing the unwelcome prospect of a messy and disorderly exit from the EU on March 29.”
She observed, astutely, that business and industry had been “navigating an economic and political landscape that is no more clear now than it was at the time of the referendum result”.
And she identified avoidance of a no-deal exit, and of the consequent damage to businesses, local communities, and the broader Scottish and UK economies, as the priority.
Colin Borland, at the Federation of Small Businesses, warned that a “chaotic” no-deal Brexit on March 29 would “damage tens of thousands of Scottish smaller firms”.
He pointed out that the average smaller firm was likely to be less prepared for such a scenario than a larger business, a situation also highlighted recently by Glasgow Chamber of Commerce chief executive Stuart Patrick.
Mr Borland declared that “a no-deal crash out is an outcome that should not be countenanced”.
Top prize in the exasperation stakes, however, probably went to the Institute of Directors.
Stephen Martin, director-general of the IoD, declared: “It is the collective failure of our political leaders that, with only a few weeks to go, we are staring down the barrel of no-deal.
“As things stand, UK law says we will leave on March 29, with or without a withdrawal agreement, and yet MPs are behaving as though they have all the time in the world. How are businesses meant to prepare in this fog of confusion?”
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Warning the “clock is still ticking”, Mr Martin noted the UK was “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”.
The dismayed response of businesses in the wake of the Brexit deal rejection is in some ways understandable. And Ms Fairbairn, Ms Cameron, Mr Borland and Mr Martin are absolutely right to highlight the danger and consequences of a no-deal exit. Such an outcome must be avoided.
Ms Fairbairn, in an interview with The Herald last year, warned a no-deal exit would be “catastrophic”. This is a realistic assessment. It is not –whatever picture the Brexiters might paint – hyperbole.
All of that said, with an eye on the long term, business leaders should be aiming higher than just limiting the damage of leaving the EU by the passing of the withdrawal agreement between the UK and EU promoted by Mrs May, or some variation of it.
It is important to remember this deal involves leaving the single market and ends free movement of people to and from other countries in the EU. It would therefore be very damaging to the UK economy in the years and decades ahead, even if it does offer a 21-month transition period after the March 29 Brexit date that would effectively enable the UK to put off the grim consequences of leaving the EU until the end of 2020.
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Surely MPs have a duty to make the most of their differences with this Westminster Government for the good of the country, rather than falling in line with a plan which damages the UK’s economy and society just because Mrs May says so.
Businesses are, understandably, focusing on the ticking clock.
But the alarm bell can be set for a later date than March 29. It would, for instance, be easy to hit the snooze button until we have another referendum, preferably without the sheer fantasy we saw from the Leave camp last time. And hopefully, when all is said and done, someone can hit the alarm-off button, keep the UK in the EU, and safeguard the living standards of the population.
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