Risk & Economy » Brexit » Business demands progress after EU Brexit extension

Business groups have reacted to the EU decision to extend the Brexit deadline until the end of October by stressing the need for politicians to agree a deal.

Carolyn Fairbairn, CBI Director-General, said: “This new extension means that an imminent economic crisis has been averted, but it needs to mark a fresh start. More of the same will just mean more chaos this autumn.

“Businesses will today be adjusting their no deal plans, not cancelling them. For the good of jobs and communities across the country, all political leaders must use the time well.  Sincere cross-party collaboration must happen now to end this crisis,” she added.

Catherine McGuinness, Policy Chair at the City of London Corporation said: “Sustained uncertainty is leaving business with its hands tied, reluctant to make everyday decisions on recruitment, expansion, and investment. While we welcome the avoidance of a catastrophic no-deal Brexit for now, a long extension should not mean we continue to kick the can down the road.

“Day by day, as uncertainty persists, so does the threat of more businesses moving jobs and operations away from the UK.  It is vital that politicians in the UK and EU come together to agree a withdrawal deal that puts people and business first and provides much needed certainty.

“Only then can we move on to the critical negotiations around our future relationship with the European Union. This should involve securing maximum market access, keeping Britain open to global talent and developing a framework for the UK to prosper in the years ahead. Above all, we must recognise the vital contribution of the services sector to a thriving economy.”

“While it is a relief that the UK will not crash out of the EU without a deal tomorrow, this extra time must be put to good use. It is vital Parliament agrees a way forward that ends the ongoing uncertainty for customers and the industry. We simply must not end up in the same position again in October,” she added.

Chaos continues

Mark Brownridge, Director General of the Enterprise Investment Scheme Association, said: “It’s chaotic at the moment. With the political backdrop we are currently experiencing, how can any business plan for the future? What SMEs need to thrive is certainty. Uncertainty breeds fear and a reticence to expand and that’s what we will see more of with the latest delay. We will now almost certainly see a slow-down in the economy that could have been easily avoided.

“If the markets and the economy know what the issues are, they can react and solutions are put in place to counter them but with the current Brexit calamity all bets are off. We are entering uncharted waters and anyone who tells you they know how this will play is lying.

“However, once certainty is secured small businesses have a fantastic opportunity to take advantage of the changes that Brexit will bring, due to the fact that they are small, nimble and highly adaptable,” he said.

Jenny Tooth OBE, CEO of the UK Business Angels Association, shared her views on what the delay could mean for regional businesses.

“As negotiations continue to drag on and eat into the transition period, which was put in place to help business prepare for the imminent loss of EU support, we are at risk of running out of time to plan and make changes. Funding for SMEs in the regions has been somewhat forgotten about recently. This will subsequently impact regional SMEs more than larger businesses that can take the hit, or areas such as London or the Golden Triangle which receive the majority of domestic investment.

The potential loss of investment from the continent including the European Regional Development Fund, Horizon 2020 and the Jeremie fund could create a huge investment gap in UK. This is concerning not only for the loss of EU money, but the risk that Government support for finance to replace this EU funding may take time to have an impact on the ground,” she said.

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