Business

The Tories can’t afford to go to war with business

For much of the past two years businesses have kept their heads down when it comes to Brexit.

For some, Brexit isn't really an issue, beyond the general economic uncertainty through which the country currently plods. For others, the agreed transitional arrangements (the UK will stay inside the single market and customs union until 31 Dec 2020) brought a sigh of a relief. It certainly calmed nerves in the City. Other firms have been making their arguments in private to ministers and Whitehall officials.

Many companies engaged in technical discussions with officials over potential customs arrangements were required to sign non-disclosure agreements, which offers another explanation as to why individual businesses haven't been particularly vocal in the past – instead leaving it to groups such as the CBI and IoD to take to the airwaves.

However, something changed last week. Companies including Airbus, BMW and Siemens have all sounded the alarm over the consequences of a 'no deal scenario.' While their comments refer to a worst case scenario (a complete breakdown of talks, no agreement on trade and no deal with the EU) their frustrations are entirely understandable.

For companies making long term investment decisions, the lack of clarity over the government's preferred end state is also causing serious concern. Cabinet ministers Jeremy Hunt and Liam Fox were pushing back yesterday, with the former telling the BBC that the Airbus intervention was “completely inappropriate” and that the company ought to “get behind Theresa May.”

Hunt is wrong. Businesses have no obligation to act as cheerleaders for the government.

Hunt was right, however, to point out that the UK is in a fierce and tense negotiation with the EU, and that in such circumstances things are going to feel “pretty tricky for business.”

Fox was also quite right to suggest that if firms are speaking out in the UK, they should be making the same representations in Brussels and in other EU capitals.

Nobody wins from a no deal Brexit. As these negotiations pan out, all interested parties should keep a cool head.

Ministers must respect businesses and maintain good relations, while firms that do decide to enter the fray should remember that there are two sides to this negotiation, and the EU will need to show some flexibility if a satisfactory deal is to be reached.

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CityAM

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