Financial Times: Business warns Brexit delay poses problems of its own

26 February 2019

British business leaders have welcomed Theresa May’s move to give parliament a say on a no-deal Brexit and the timing of the UK’s departure of the EU. But they have also warned that a delay of several months could confront companies with big logistical problems.

The UK prime minister set out plans on Tuesday for the House of Commons to choose between a revised deal, no-deal and a delay of no more than three months. The votes would take place no later than March 12-14, little more than a fortnight before the scheduled Brexit date of March 29.

In response, business groups expressed relief that the prospect of leaving the bloc without an agreement had receded.

“While this is a giant political leap for the prime minister, this is only a small step towards the clarity and precision that businesses need to chart their future direction,” said the British Chambers of Commerce.

Some industry bodies also voiced concern that they now had to prepare for two so-called cliff-edges: March 29 and the end of June.

“Small businesses will still be concerned that even if parliament vote to avoid a no-deal Brexit on March 29, they may still face one later down the road,” said Mike Cherry of the Federation of Small Business.

“The spectre of revisiting a last-minute no deal in the coming months will still make it hard for many small firms to plan, invest and hire.”

Stephen Phipson, chief executive of Make UK, the British manufacturing association formerly known as the EEF, said, in reference to some groups’ decisions to shift activities outside the UK: “If we end up at an impasse again you’ll find that people will take even more dramatic action.”

Mr Phipson added: “There is no universe in which prolonging the chaos is going to help businesses prepare better.” He added that in order to have a useful transition period, “what we need is to get a deal agreed on March 12”.

However, Edwin Morgan, interim director-general of the Institute of Directors, said that many companies were simply not ready for a possible no-deal and could take advantage of a three-month delay to the end of June.

“This is really speaking to our members’ deep, deep sense of frustration that politicians seem completely unable to find compromise and make progress . . . [but] the next best thing is giving businesses more time to prepare,” he said. [...]

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