The president of Britain’s most powerful employers’ body, the CBI, is to endorse Theresa May’s draft European Union withdrawal agreement, arguing that while not perfect it opens “a route to a long-term trade arrangement”.
Joining a growing chorus of business leaders warning that a cliff-edge Brexit could be calamitous for the UK economy, John Allan will use a speech on Monday at the CBI’s annual conference in London to warn that Brexit turmoil is “damaging our country now”.
The CBI president is expected to say: “In the past few days alone, I’ve heard of a life sciences firm in the north-west that has cut almost all investment in the UK – putting it instead in Germany and China. I’ve heard of a Northern Irish tech firm that has stopped winning contracts because their aerospace customers are worried about Brexit. And a construction firm says it now costs an extra £20,000 to build a house, due to a shortage of materials and labour since Brexit. These stories are repeated across the country.”
Allan’s show of support for May comes as concerns mount among businesses that a no-deal outcome will severely disrupt supply chains and cause widespread shortages. The UK is already running out of food warehouse space as no-deal fears rise. Owners of storage facilities say demand has reached “fever pitch” since last week’s chaos over the publication of May’s plan.
The CBI has thrown its support behind the proposed deal after its policymaking committee canvassed the views of 900 business leaders across Britain and found unanimous support for the withdrawal agreement.
Allan is expected to say: “We’re trying to reach a deal that respects the result of the referendum and minimises damage to our economy. I know how hard it’s been to get to this point. In the five months I’ve been president of the CBI, the team and I have met ambassadors, MPs, MEPs, heads of state.
“And I know this: every single one of them has had to compromise in reaching that deal. While companies in this room would be the first to say that it is not perfect, it does open a route to a long-term trade arrangement and unlocks transition – the very least that companies need to prepare for Brexit. And most importantly, it avoids the wrecking ball that would be a no-deal departure.”
Allan will refer to research by Oxford Economics which suggests that the UK’s GDP will fall by 2% in the short-term andcould be 8% lower in the longer term as a result of a hard Brexit.
Other high-profile figures in the corporate world who have backed May’s draft agreement include Jürgen Maier, the UK chief executive of German engineering giant Siemens, and Warren East, the chief executive of Rolls-Royce.
But not all business groups have thrown their support behind May. The Alliance of British Entrepreneurs is expected to send letters to every MP in the country on Monday signed by 200 chief executives, founders and entrepreneurs – including JD Wetherspoon chairman Tim Martin – urging them to vote down the proposed Brexit deal. The ABE was founded in 2018 to represent firms that believe Britain can thrive after Brexit.