The UK government's stated position that it would simply walk away from the EU rather than agree to a bad Brexit deal, was an unacceptable strategy to the nation's business community, the head of the country's largest manufacturers' organisation has warned.Dame Judith Hackitt, who chairs the manufacturers' group EEF, told the organisation's annual conference and dinner in London on Wednesday that jobs and investment would suffer if businesses were left on a “cliff edge of uncertainty” over Brexit.

Protecting the right to remain

Her warning came as a report from the Institute of Directors (IoD) also warned of the dangers of a “cliff-edge” exit as it repeated its call to the government to make a priority of guaranteeing the right to remain of the three million EU citizens in the UK. The IoD pointed out that 40 per cent of its members employed staff originating from the continent.In her speech, Dame Judith Hackitt said, “Uncertainty and confusion will result in business being left on a cliff edge. While the prime minister has warned of walking away and, that no deal is preferable to a bad deal, that is not an option that business can accept because no deal means prolonged uncertainty and confusion.“What we must have is a deal that ensures our economy continues to thrive* and is not sacrificed on the altar of satisfying assumed expectations in a referendum vote. That means a settlement that allows us to continue investing and creating the high-value jobs our economy will need in the future.”

'Smooth and orderly' EU exit

Meanwhile, the IoD report put forward proposals to ministers for ensuring a ‘smooth and orderly’ exit from the EU. Prosposals included minimising potential customs delays by setting up a joint customs cooperation committee with the EU; giving consideration to the possibility of re-joining the European Free Trade Association, which would not prevent the UK from signing trade deals outside Europe; and pursuing some ‘quick-wins’ on areas of ongoing co-operation, such as participation in the EU’s Horizon 2020 scientific research programme.Stephen Martin, IoD director-general, said, “British businesses want to make Brexit work, and are keen to explore trade opportunities with the rest of the world that arise once we leave the EU. But the first priority must be ensuring the exit process is a smooth as possible.

Companies remain resilient

“This means avoiding a vacuum between the withdrawal agreement being settled and a new trade deal with the EU coming into effect. Companies have remained resilient over the last few months and will do everything they can to maintain investment and hiring plans when Brexit negotiations get underway.“On its side, the government must maintain business confidence through consistent communication that they are working to avoid a ‘cliff-edge’ scenario, where the UK has to fall back on WTO rules for trading with the EU.”A spokesman for the Department for Exiting the EU said, “We've made it clear we will pursue a phased process of implementation, where necessary, to prevent a disruptive cliff edge for all our businesses.

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“Britain is a market for £290 billion a year of European exports and it is in no-one's interests for there to be a threat to stability. We want to reach an agreement about our future partnership by the time the two-year Article 50 process has concluded.”* Britain's economy grew slightly faster than previously thought in the final quarter of 2016, boosted by a rise in manufacturing output. The Office for National Statistics said GDP expanded by 0.7 per cent in Q4, up by 0.1 per cent on its initial estimate.For related news and features, visit our Brexit section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

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