Carolyn Fairbairn tells Prospect a no-deal outcome would bring chaos—and more firms will soon start activating their contingency plansby Jemma Slingo / January 12, 2019 / Leave a comment
As the Brexit “meaningful vote” rapidly approaches and “no deal” looks ever more likely, Prospect sat down with the Confederation of British Industry’s Director-General, Carolyn Fairbairn, to talk about the impact Brexit will have on British business. This interview has been edited and condensed.
Prospect: How great a threat do you think Brexit is to business in Britain?
Carolyn Fairbairn: Brexit has been a massive concern for business right from the aftermath of the referendum, although I think firms have been very much in the boat of wanting to get on with it and make a success of it—that has certainly been the CBI position. So there hasn’t been a sense of trying to reverse the result. But I have to say that uncertainty has just grown over the last two and a half years. The real concern now is that we just crash out with no deal. I think there are two major threats to our economy from that. One is the immediate disruption and the other is the longer term loss of competitiveness.
In terms of the short run disruption, I think the biggest things on business minds at the moment are around rationing of ports, so the real challenge around getting parts, supplies, food, medicines in through port capacity which may shrink by as much as 75 per cent. In the services sector there is a real concern about insurers’ contract continuity and the fact there would be tariffs on 90 per cent of our exports. So that’s immediate disruption.
In the longer term, there is a fundamental issue around what happens if you put grit into the system of trade that you have with your closest trading partner. What business really feels is that no deal or, indeed, a Canada-type relationship—which is kind of no deal-lite in many ways, because it would significantly increase border checks and friction—would fundamentally reduce the competitiveness of the UK.
So, the long and short of it, Brexit is a really significant threat. What business really wants to be doing is getting on with the other very major opportunities for the UK which are around being a world leader in tech, addressing manufacturing, addressing our productivity issues, our skills issues. That is the other cost of…