Bosses ‘tearing their hair out’ over Theresa May confidence vote
Written by News on 12/12/2018
Business groups have voiced their dismay after Tory MPs triggered a confidence vote in Theresa May, with one saying bosses were “tearing their hair out” at the latest developments.
The Institute of Directors (IoD) said politicians had delivered even greater uncertainty in the run-up to Brexit, while the British Chambers of Commerce (BCC) said firms felt “utter dismay”.
Engine maker Rolls-Royce said it would continue contingency plans – including stockpiling parts and shifting one technical part of its operation to Germany – until there was greater certainty about Brexit.
Experts at GlobalData have predicted that a hard Brexit would wipe £2.3bn off the UK non-food retail market, with Dixons Carphone and Superdry both pointing to consumer uncertainty as they delivered gloomy trading updates.
Financial markets were initially little affected by the confirmation that Mrs May would face a vote of no confidence on Wednesday, with the pound having already fallen to a 20-month low on Tuesday as signs of a challenge to the prime minister mounted.
In fact, they recovered some ground on Wednesday, with the FTSE 100 gaining almost 1.1% by the close while sterling was at $1.2660 as the stock market shut for the day.
The pound had earlier hit a day-low of $1.2475 but investors later bet Mrs May would see off the challenge from her hard Brexiteer MPs – bolstering the chances of a soft Brexit or even no Brexit.
Even if she wins the day – securing protection from another Tory confidence vote for at least a year – the PM is still struggling to convince parliament on the merits of her Brexit deal.
IoD director general Stephen Martin said: “The last thing businesses needed today was even more uncertainty – and yet politics has managed to deliver on that once again.
“Many business leaders, along with the rest of the country, will be tearing their hair out at the state of Westminster politics at the moment.
“Cool heads must prevail. Ensuring economic stability and certainty in the months ahead should be priority number one for all politicians.”
Adam Marshall, director general of the BCC, said: “At one of the most pivotal moments for the UK economy in decades, it is unacceptable that Westminster politicians have chosen to focus on themselves, rather than on the needs of the country.
“The utter dismay amongst businesses watching events in Westminster cannot be exaggerated.
“Our firms are worried, investors around the world are baffled and disappointed, and markets are showing serious strain as this political saga goes on and on.
“History will not be kind to those who prioritise political advantage over people’s livelihoods.
“Businesses need politicians, regardless of party or views on Brexit, to understand that their high-stakes gambles have real-world consequences of the highest order.”
Stephen Phipson, chief executive of manufacturers’ organisation EEF, said: “Business was already staring down the barrel of substantial uncertainty with manufacturing activity grinding to a halt and investment being cut back.
“A leadership challenge now is extremely unhelpful and the last thing that Industry wants to see.”
Rolls-Royce said after the delay to the Commons vote on the PM’s Brexit vote, it would “continue to implement our contingency plans until we are certain that a deal and transition period had been agreed”.
The company has already – like a number of other businesses – begun to stockpile parts in case there is a no-deal Brexit which could cause delays at borders affecting its supply chain.
It is also pressing ahead with plans to transfer design approval for large aircraft engines to Germany, in what it describes as a “precautionary and reversible technical” action which will not result in the relocation of any jobs.
Karla Rendle, senior retail analyst at GlobalData, said: “Retailers are coming to terms with the fact that there is a real need to plan for a hard Brexit scenario, with an end to free trade and no customs union between the UK and the EU.
“Increased tariffs, delays at ports and borders and a sharp fall in the pound, pushing up the cost of imports, would all have a negative impact.”
Businesses have been increasingly vocal in recent weeks about the potential impact of a no-deal with many coming out in support of Mrs May’s Brexit plan – though a number of prominent Leave supporters have been strongly critical.
:: The confidence ballot takes place between 6pm and 8pm tonight, with the result at 9pm. Follow live on Sky News
(c) Sky News 2018: Bosses ‘tearing their hair out’ over Theresa May confidence vote
