Business sounds alarm over Brexit 'chronic uncertainty'

Companies are heaping pressure on the British government to explain its plan for Brexit.Foreign automakers, Br...

Posted: Feb 8, 2018 7:40 PM
Updated: Feb 8, 2018 7:40 PM

Companies are heaping pressure on the British government to explain its plan for Brexit.

Foreign automakers, British banks and thousands of companies are urging Prime Minister Theresa May to provide clarity about future trade with the European Union.

"There is no room for continued ambiguity as companies make investment and hiring decisions," the British Chambers of Commerce wrote Wednesday in a letter to May.

"The government must set out its plans," added the group, which represents companies with 6 million workers.

Britain will leave the EU in just 13 months, but May's cabinet is still divided over how close a relationship the country should seek to retain with its biggest export market.

May meets senior ministers this week in an attempt to settle on a way forward, but she has been conspicuously silent even as businesses cry out for clarity.

Uncertainly is already dragging down the U.K. economy, which is now the slowest growing in Europe and the G7.

Related: The CNNMoney Brexit jobs tracker

May will also meet Thursday with investors and executives from Japan.

Many Japanese corporations have invested heavily in the U.K., including global banking giant Nomura and top automakers Toyota, Nissan and Honda.

Japan published a detailed list of its concerns about Brexit shortly after Brits voted in the EU referendum in 2016.

Japanese firms wanted reassurances that the U.K. would seek to limit any "harmful effects" on their businesses, according to the government document.

It warned that those with European headquarters in the U.K. may move those functions elsewhere in Europe "if EU laws cease to be applicable in the U.K. after its withdrawal."

Japan's foreign ministry confirmed Thursday that it stands by the memo.

The top European executive from Nissan, which employs nearly 7,000 people at the U.K.'s largest car factory, attended the meeting with May, along with representatives from Hitachi, Toyota, Honda, Mitsubishi, SoftBank and Mizuho.

Related: Britain's most painful Brexit choice is all about trade

Urgent requests for clarity are also being made on behalf of banks and financial services companies.

Nicky Morgan, a lawmaker who chairs the influential Treasury committee in the House of Commons, accused the government of throwing the sector into a "chronic state of uncertainty."

Many companies will begin to activate contingency plans for Brexit next month, but still don't know what the government hopes to achieve in terms of access to European markets, she said in a statement.

"The clock is ticking for the financial services industry," Morgan added.

Consulting firm Oliver Wyman estimates that 75,000 finance jobs could be lost in the long term if Brexit goes badly.

The U.K. government says it believes it can achieve "as frictionless as possible" trade with the EU because doing so is in the interest of both parties.

Even if top British politicians can settle on a preferred option, there's no guarantee it will be accepted by the EU.

"This is a crucial year for the Brexit negotiations and of course we will all be better informed, we hope, by certainly this time next year about the future trading relationship with the EU," Bank of England Governor Mark Carney said Thursday.

-- Simon Cullen, Chris Liakos, Ivana Kottasov- and Yoko Wakatsuki contributed reporting.

Minnesota Coronavirus Cases

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