“This Is No Way to Run a Country!” Businesses Rage at Brexit Economic Suicide as $1 Trillion Exits UK

Theresa May Brexit

British Prime Minister Theresa May has lost control of Brexit and the confidence of citizens with it.. | Source: REUTERS/Henry Nicholls

Britain is running head-first into economic suicide. That’s the verdict from furious business owners in the UK as we enter the third day of shambolic Brexit votes.

The latest voice to join the backlash is Carolyn Fairbairn, the head of the Confederation of British Industry (CBI), which represents 190,000 companies.

Speaking of the last-minute trade scenario for Brexit, she said the proposed rules are:

“[A ] sledgehammer for our economy… This is no way to run a country. What we potentially are going to see is this imposition of new terms of trade at the same time as business is blocked out of its closest trading partner.”

A Week of Shambolic Brexit Votes

To recap what’s happened this week so far:

  • Monday – Prime Minister Theresa May emerged from EU negotiations with a new Brexit deal.
  • Tuesday – The deal was put before parliament, rejected by 149 votes.
  • Wednesday – Parliament voted to reject a “no deal” outcome.

It leaves the country in an impossible position. Parliament has rejected the only deal on the table, but also rejected a “no deal” outcome.

With no options left, they’ll vote again today (Thursday 14th March) to extend the Brexit deadline. But even that doesn’t guarantee anything. The EU still has to agree to an extension, which it will only do under reasonable conditions.

It’s an infuriating position for Britain’s businesses who cannot plan or prepare for the impending exit. As Helen Dickinson, chief executive of the British Retail Consortium explains:

“Hundreds of ships are currently sailing towards Britain without a clear understanding of the tariffs, checks, or documentation requirements, they will face when they arrive.”

$1 Trillion Leaving London

With two weeks until the Brexit deadline, companies are giving up and moving people and assets out of the country. An estimated $1 trillion in banking assets has already been moved to Europe in anticipation of Brexit (representing 10% of the financial service economy).

And here’s a list of companies moving operations out of the UK:

  • Panasonic – moving its European HQ to Amsterdam.
  • Sony – moving its European HQ to Amsterdam.
  • Goldman Sachs – moving staff to Frankfurt.
  • BlackRock – “making bigger plans on moving different components of our business to the continent or to the United States.”
  • Unilever – Chose to open new HQ in Rotterdam over London.
  • EasyJet – Set up new HQ in Austria.
  • Lloyds of London – the insurance company is moving operations to Brussels.
  • Barclays – moving staff to Dublin.
  • Dyson – moving to Singapore, no longer a registered British company.
  • Airbus – threatening to move on “no deal” outcome: ”If there’s a no-deal Brexit, we at Airbus will have to make potentially very harmful decisions for the UK.”
  • HSBC – moving 1,000 jobs to France.
  • Jaguar Land Rover – cut 4,5000 jobs due to Brexit.
  • Ford – cut 400 jobs in Wales.
  • Nissan – stopping production of the X-Trail SUV in Sunderland.

This list is by no means exhaustive. According to one survey, a third of all British companies are considering leaving the country. And the Dutch government claims it’s courting 250 British businesses in a bid to move to Amsterdam or Rotterdam.

Investment in the British car industry fell 50% last year. Relentless economic downgrades (like the recent OECD forecast) paint a gloomy picture of the future. And even the housing sector is predicted to take a hit.

The message is clear: Brexit, in all forms, is bad for business.

Delay or No Deal: Both are Economic Suicide

If parliament votes to delay Brexit in Thursday’s vote, it will do little to restore faith in the economy. As the British Chamber of Commerce outlined:

“A deadline that is continuously pushed back isn’t a deadline, it’s an invitation to cancel investment, stop hiring, or move UK operations somewhere else.”

No matter what happens in today’s vote, Britain’s businesses are heading for short-term economic crisis. 

Last modified: September 23, 2020 12:35 PM
Ben is a journalist with a decade of experience covering financial markets. Based in London, UK, his writing has appeared in The Huffington Post and he was Chief Editor at Block Explorer, the world's longest-running source of Blockchain data. Reach him at Twitter at _Ben_Brown. Email ben @ benjamin-brown.uk.
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