Business leaders welcome cabinet approval of May's Brexit deal

Business leaders have welcomed cabinet approval for Theresa May’s draft Brexit agreement but warned that that parliamentary divisions should not be allowed to derail the chances of a deal.

The Confederation of British Industry, Britain’s leading business lobby group, said it was “a step back from the cliff-edge”.

Its director-general, Carolyn Fairbairn, said: “After 20 months of debate, this agreement by cabinet is progress. It moves the UK one step away from the nightmare precipice of no deal and the harm it would cause to communities across the country. Securing a transition period has long been firms’ top priority and every day that passes without one means lost investment and jobs, hitting the most vulnerable hardest.

“Time is now up. This deal is a compromise, including for business, but it offers that essential transitional period as a step back from the cliff-edge.”

Before the details of the deal were released on Wednesday night, lobby groups including the Institute of Directors and the British Retail Consortium said any degree of certainty about Britain’s future relationship with the EU, no matter how hazy, would help businesses.

After the withdrawal agreement was released, Stephen Jones, the chief of UK Finance, the trade body for the banking and finance industry, said: “Securing an agreed text on the withdrawal agreement is an important step forward in avoiding a damaging and disorderly exit from the European Union. However, the hard work needs to continue. The country’s economic future depends on politicians showing pragmatism over ideology and having an honest debate about the true cost of leaving the EU without a deal in place.

“The finance industry will continue planning to minimise any disruption from a ‘no-deal’ scenario, until the agreement has been ratified on both sides of the channel. During this time it is vital that both the EU and UK continue to work together to address potentially critical cliff-edge issues … The future framework shows important progress has been made in defining the nature of the UK’s long-term relationship with the EU. These commitments must be solidified to ensure we can enable meaningful future cross-border market access in financial services.”

Business leaders still fear that political infighting could stymie the deal, leaving the UK to crash out of the EU with no agreement in place.

Helen Dickinson, the chief executive of the British Retail Consortium (BRC), said the draft agreement was a “welcome step towards a deal”, adding that retailers “urgently need certainty as we approach the date of the UK’s departure from the EU”.

She added: “It is vital that we avoid the cliff edge of no deal in March 2019 as this could immediately lead to consumers facing higher prices and reduced availability of many everyday products.”

Following the cabinet agreement, Stephen Martin, the Institute of Directors director-general, echoed the BRC in urging politicians on all sides of the Brexit argument not to let their disagreements allow the UK to end up crashing out with no deal.

He said: “We urge all politicians to think long and hard about how they react to this first-stage agreement. Leaving the EU without a deal is a very bad outcome for businesses, workers and consumers, and this is simply an inherent risk that comes with voting down any withdrawal deal. Our members will adjust to a new relationship with the EU, but they must be allowed to do this in as smooth and orderly manner as possible.

“We, like many, will be seeking clarification from both sides about several areas, in particular on the remaining detail for the future framework declaration. But we are also heartened to see that provision has been made for an extension to the transition period, which may be needed not only to avoid the deployment of the backstop but also to ensure firms have enough time to adjust to any new changes once the new economic partnership has been agreed.”