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Brexit: businesses warn of clear job losses

Brexit: businesses warn of clear job losses

Multiple business groups have this week issued warnings to the Government regarding their handling of the Brexit process, and slammed the lack of clarity over the final deal. 

Airbus was the first. They have been piling pressure on the Government to reach a clear and effective agreement on the post-EU trade deal, one which continues to guarantee frictionless trade with the continent. Airbus has signalled that it is soon to make a decision regarding its future operations in the UK. The company has warned of the severe negative consequences of Brexit, which could force it to leave the UK.

With 20,000 Aerospace workers in the South East, and around 18,000 in the East Midlands alone, along with 4,000 UK-based suppliers, the threat to jobs is clear. 

BMW joined Airbus, giving a more concrete warning that they will shut UK sites if customs delays slow down supply chains. BMW have made this threat on the basis that any delays for Mini or Rolls-Royce parts being either imported or exported are costly and therefore unacceptable. 

Should either business decide to follow through on their threats, it could cost the UK economy billions, and thousands of jobs. 

Government Health Secretary Jeremy Hunt shook off the implications that the Government-led Brexit deal was anti-business. He argued that it was inappropriate for big businesses to issue such warnings. 

The first casualty of these warnings was Andrew RT Davies, who resigned as Welsh Conservative leader. He has been widely criticised from within the Conservative party for suggesting that corporations like Airbus were wrong in their warnings, and were undermining the Brexit process. 

What are these warnings all about?

The future trading relationship with the EU is central to both of these warnings. 

In her Mansion House Speech in March this year, the Prime Minister committed to leaving both the Single Market and Customs Union to ensure that the UK has no financial commitments, and can end Freedom of Movement. These are the mechanisms that ensure free trade (tariff-free) of goods and services across the EU member states. In short, a potato picked in Southend to be exported to Sicily as easily as Stevenage. 

Therefore, businesses corporations such as Airbus, that rely on EU-wide supply links, are keen for the UK achieve a trade deal as close to the current Single Market and Customs Union. Their apparent divergence with the Government is seemingly the cause of this warning.

The ultimate details of the future trading relationship, or more specifically the relationship the Government will be pushing for, will be revealed in another Brexit White Paper on 11 July. 

It is hoped that this will conclude the cabinet divergences, heal the party, and provide the clarity businesses require. However, given the wider variety of groups to please, from the Cabinet, to the wider Conservative party, as well as businesses and ultimately Brussels, this will not be an easy task. 

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