Firms plead for Brexit deal as coronavirus leaves industry reeling

Almost half of British companies have warned that their Brexit preparations have been hit by the pandemic, as business leaders demanded a last-minute compromise to reach a trade deal and avert chaos at the border.

As a crucial week of talks begins, more than three-quarters of businesses (77%) said they wanted a deal to be agreed, according to a survey by the Confederation of British Industry. Only 4% of businesses said they preferred a no-deal outcome. Support for a deal rises to 86% among distribution companies and 83% of manufacturers.

Mixed messages have been coming from Downing Street and Brussels over the likelihood of a deal. No 10 had been talking up the possibility of an agreement after months in which no progress has been made – with the chances of a no-deal Brexit significantly increasing.

However, Brussels remains concerned that Boris Johnson is showing no willingness to compromise over sticking points such as fisheries and state aid rules. The government’s refusal to withdraw the internal market bill, which threatens to “disapply” parts of the Northern Ireland protocol already agreed by the two sides, continues to pose a major obstacle.

The EU’s chief negotiator, Michel Barnier, has told ministers from the remaining EU countries that there was “a more open atmosphere at the negotiating table” but that “substantial differences of opinion remain”.

Businesses are already struggling. The CBI’s latest growth indicator found that private sector activity fell in the three months to September, but at a slower pace than last month: at -23%, compared with -39%. Carolyn Fairbairn, the CBI’s director-general, pleaded: “Now must be the time for political leadership and the spirit of compromise to shine through on both sides. A deal can and must be made.

“Businesses face a hat-trick of unprecedented challenges: rebuilding from the first wave of Covid-19, dealing with the resurgence of the virus and preparing for significant changes to the UK’s trading relationship with the EU.

“A good deal will provide the strongest possible foundation as countries build back from the pandemic. It would keep UK firms competitive by minimising red tape and extra costs, freeing much-needed time and resources to overcome the difficult times ahead.”

Business concerns have been rising again after warnings about tailbacks at Dover if no deal is reached when the Brexit transition period ends on 1 January. Last week, Michael Gove, the Cabinet Office minister, said lorries will require a permit to enter Kent in an attempt to stop logjams. He also admitted that in a “reasonable worst-case scenario” only 50% to 70% of large businesses would be ready for new post-Brexit border controls.

Meanwhile, there has been continuing fallout from the internal market bill. Ministers have admitted that it breaches international law in a “specific and limited way”. The EU could start infringement proceedings as soon as this week.

Hundreds of lawyers have written to their MPs complaining about the move. The Law Society said that 20% of the 5,000 people who have taken part in its Defend the Rule of Law letter-writing campaign were its own members.

A Law Society spokesperson said: “We launched a campaign action encouraging people to write directly to their MP about the rule of law and the internal market bill. In just one week, just under 5,000 people contacted their MP through our tool alone, making this one of the largest actions the Law Society has seen.”