Brexit Already Prompting Investment Cuts, CBI’s Fairbairn Saysby
Some businesses factoring in ‘cliff-edge Brexit’ uncertainty
Lobby-group head says government needs to share information
Some U.K. companies are already taking decisions to cut investment because of the uncertainty over the shape of the post-Brexit deal with the European Union, the head of the country’s main business lobby group said.
Following Prime Minister Theresa May’s announcement earlier this month that she’ll trigger the two-year timetable for leaving the bloc by the end of March, companies are now facing a 29-month period before Brexit actually happens, CBI Director General Carolyn Fairbairn said on Thursday.
“That is within the planning horizon of most businesses, and investment decisions that are being taking now inevitably have to factor in that uncertainty,” she told an event organized by the CBI at the Scottish National Party’s annual conference in Glasgow. “There are some businesses that are so affected by a cliff-edge Brexit, by no transitional arrangements, that they have to assume the worst and they are having to make decisions that reflect that.”
Financial-services companies, confronted with the possible loss of passporting rights to sell their products elsewhere in the EU, and manufacturing are particularly hit, Fairbairn said.
The CBI chief repeated a call to the U.K. government to share more information about the negotiating process to help businesses. May and her ministers insist there’ll be no “running commentary” on the talks.
“A running commentary and no commentary are two different things,” Fairbairn said. “If there is no commentary at all, then we, others and the media will fill the void.”
Graham Hutcheon, the operations director of distiller Edrington, which makes whiskies such as The Macallan and The Famous Grouse, told the event that the pound’s recent fall means the company is “having a jamboree time” for exports, but that’s unlikely to last and input prices are set to rise. He urged the government to provide clarity on Brexit.
“We don’t know the questions to ask, let alone answer,” Hutcheon said.