The parliamentary vote to send Prime Minister Theresa May back to Brussels to try and renegotiate the Brexit Withdrawal Agreement has left British business bosses distinctly unimpressed.

House of Commons vote to scrap the Irish 'backstop' clause

The House of Commons voted on Tuesday evening in support of a motion calling on the government to scrap the Irish 'backstop' clause - which guarantees an open border between Northern Ireland and the Republic in the event of the UK and EU failing to reach a post-Brexit trade deal - and order ministers to reach a new arrangement with the EU27.On Wednesday, however, Brussels officials and EU politicians repeated that it would not be possible to renegotiate any part of the Withdrawal Agreement, which had taken more than 18 months to agree between the two sides.Carolyn Fairbairn, director-general of the Confederation of British Industry (CBI), expressed her frustration over the continuing parliamentary impasse over the withdrawal deal and warned of the dangers facing companies - particularly manufacturers, insurers and small firms confronting a “cliff edge” Brexit on March 29.In an interview with the BBC Radio 4 Today programme, she said, “The reaction of business today will be one of rising frustration and concern. The main objective that business has is to avoid no deal. Did yesterday do anything to move us further away from no deal? And I think the answer feels as though it is no.”

EU politicians repeat it is not possible to renegotiate Withdrawal Agreement

Asked about the Commons amendment successfully tabled by Labour MP Jack Dromey and the Conservative MP Caroline Spelman to rule out a no-deal outcome, Ms Fairbairn said: “It is welcome to see that there is a consensus against no deal, but it is not binding. It does nothing practically to take 'no deal' off the table and it does feel like hope rather than strategy.“I don’t think there will be a single business this morning who is stopping or halting their no-deal planning as a result of what happened yesterday."And I fear they may even be accelerating it, because the (Irish backstop) amendment feels like a real throw of the dice to be returning to renegotiate something that has been so difficult to negotiate. If the renegotiation goes ahead, which it sounds as though it will, let’s move very quickly so we know the outcome.”

Business leaders express frustration and concern with government and Brexit

She said some businesses were ready for a hard Brexit but only ten per cent of small and medium-sized firms had drawn up contingency plans.“There are some businesses who are ready. Financial services have been able to prepare a long time in advance and it hasn’t been comfortable and they spent a lot of money on it but they are broadly ready," she said."The real areas of concern now are around manufacturing, other services, broadcasting actually insurance is still not in great shape, they are deeply concerned. We said before 'no deal' is just not manageable at this stage.”Adam Marshall, director-general of the British Chambers of Commerce, echoed the frustration that companies were feeling as March 29 came ever closer.“Another day lost while the clock is ticking. Government and parliament are still going round in circles when businesses and the public urgently need answers," he said.

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“The real-world result of Westminster’s interminable wrangling is market uncertainty, stockpiling, and the diversion of staff, money and investment. For every big-ticket business announcing high-profile Brexit-related decisions, there are many more quietly making the changes they need in order to safeguard their operations in the event of a disorderly Brexit. The net result of this displacement activity and uncertainty is slow but very real damage to the UK economy.“A messy and disorderly Brexit on March 29 would cause widespread damage to businesses and communities across the country. Neither Government nor many businesses are ready for a no-deal exit in two months’ time, and it must not be allowed to happen by default.”

Uncertainty and Brexit no-deal planning is already costing the UK economy

Stephen Martin, director-general of the Institute of Directors, said that, while it was a relief MPs had managed to form a majority in any vote about Brexit, the path ahead was still far from clear."The prime minister clearly faces a difficult task in winning a compromise on the backstop. However, if the choice is between trying to change the deal and leaving without one, business will have to hope the EU can be flexible and consider whether any legal changes at all could further clarify that the backstop is not a permanent fixture.“With March 29 still on the statute book as our point of exit, every passing day brings no-deal draws closer, and sees more firms forced into activating potentially unnecessary and costly contingency plans – many of which involve moving business out of the UK."Much more information on what would happen on day one of no deal is needed to ensure any adequate level of business readiness. We still don’t know what the UK’s applied tariffs or full changes to customs processes would be, and there is virtually no guidance on planning for firms in Northern Ireland.“The prime minister’s commitment to a second Meaningful Vote (on the Withdrawal Agreement) in a fortnight is helpful in the face of these pressing timescales. The PM must go one step further, however, and set out now in clear terms what would happen if this second vote is lost. Business leaders need to know whether that would mark the point of no return for leaving without a deal.”Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online DirectorySubscribe to Relocate Extra, our monthly newsletter, to get all of the international assignments and global mobility news.

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