Business groups have reacted with apprehension after Theresa May’s proposed Brexit agreement was rejected in parliament, which has prolonged uncertainty and heightened the prospect of a no-deal scenario.
The negative impact of a potential no-deal situation was highlighted by several industry figures, given its scope to block investment and disrupt the wider economy.
However, some were optimistic that the outcome could delay the Article 50 process, so that the UK would not have to leave the EU on 29 March.
Melanie Leech, chief executive, British Property Federation
“As parliament has not given its assent in the meaningful vote, the government must set out urgently its plan to find a solution that the country can rally behind. It is critical that the government avoids the disruption and uncertainty posed by no deal.
“Leaving the EU with no withdrawal agreement would be harmful to investment and the property sector’s ability to deliver new homes, support economic growth, regenerate towns and cities and help increase productivity – all benefits to people and businesses across the UK that the sector is keen to contribute.”
Adam Marshall, director-general, British Chamber of Commerce
“Basic questions on real-world operational issues remain unanswered, and firms now find themselves facing the unwelcome prospect of a messy and disorderly exit from the EU on 29 March.
“The overriding priority for both government and parliament must now be to avoid the clear danger that a no-deal exit would pose to businesses and communities across the UK.
“Every second that ticks by sees more businesses spending money on unwanted changes, activating contingency plans or battening down the hatches and halting investment, as they try to anticipate a future that is no clearer now than it was at the time of the referendum result.”
Helen Dickinson, chief executive, British Retail Consortium
“The events in Westminster are cause for serious concern. A no-deal Brexit means the public will face higher prices and less choice on the shelves. British businesses desperately need certainty about the UK’s future trading relationship with the EU and will be severely disadvantaged by a no deal.
“This really is crunch time and politicians must come together around a workable solution that safeguards consumers from the costs and disruptions of new constraints on the tariff-free and frictionless trade we currently enjoy with partners in the EU. The time for parliamentary games is over.”
Catherine McGuinness, policy chair, City of London Corporation
“Parliament’s decision to reject the government’s deal means businesses across the UK will continue to face uncertainty regarding our relationship with the European Union.
“The government must now urgently set out its ‘Plan B’ to ensure we can secure a deal locking in a legally binding transition before 29 March.
“Financial stability must not be jeopardised in a game of high-stakes political poker. Politicians across all parties should work together pragmatically to avoid a no-deal Brexit, which would be a hugely damaging outcome for households and businesses on both sides of the Channel.
“In the meantime, it is critical that EU regulators urgently address cliff-edge issues such as contract continuity and data flows. These are issues that could disrupt cross-border financial services and prevent firms from serving their customers.
“We need firm action, not just rhetoric, to deal with these issues in the coming days and weeks.”
Mario Berti, chief executive, Octopus Property
“Although forecast, the size of the defeat is a real blow to the UK real estate sector. Whilst a lot of the uncertainty caused by Brexit has been priced into the property market, this result is likely to lead to even more reluctance among real estate developers and investors to move forward with their UK real estate strategies, which will negatively impact the whole sector.”
Guy Harrington, chief executive, Glenhawk
“This outcome is certainly better than the deal that was on offer, that’s for sure. The sooner it is taken off the table, the better. Hopefully any further negotiations with the EU will now be delayed, and ultimately Brexit cancelled.”
Andy Soloman, chief executive, Yomdel
“If the relative calm before the storm has brought a further reduction in house prices, transaction levels and buyer interest, one must wonder what the forecast will be now the political headwinds have hit gale force level following yet another disastrous Brexit vote.
“We will no doubt see many buyers and sellers batten down the hatches until further notice but once stability does return, it won’t take much for the UK property market to dust itself off and activity to pick up once again. The question is, how much damage will have been done before we reach this point and how long will it take to rebuild?”
Tom Brown, managing director of real estate, Ingenious
“What started in June 2016 as a political and constitutional crisis has, with time, spread into the wider economy. In response investors seem to be biding their time and waiting for greater clarity before committing their cash. This is reflected in property markets where transaction volumes have reduced on account of a mismatch between vendors and purchasers’ expectations. In the longer term, the UK will quickly re-establish itself as an attractive place to invest once confidence returns to markets.
“What investors and business so urgently need is clarity for the longer term before markets can return to normal, which may be some time away. We’re sympathetic to those that think the Article 50 process should be extended to allow time for greater consensus to be reached on a cross party basis, which will enable the UK to go back to the EU with a clearer account of what it wants. This now seems all but inevitable.”
