City leaders sound alarm over risk of no-deal Brexit ‘cliff-edge’

Louis Ashworth
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Conservative Party Conference - Day One
Pro-Europe protestors outside the Conservative Party Conference in Birmingham (Source: Getty)

City leaders have issued an urgent plea as Conservative conference gets underway, calling on the government to embrace a special deal for EU migration and avoid veering off a “Brexit cliff-edge” over compliance issues.

The majority of business leaders said a non-deal Brexit would have a negative effect on their businesses, with over a third saying they have no contingency plans in place for when Britain exits the European Union, according to polling by the Institute of Directors (IoD).

Stephen Martin, the IoD’s director general, said “continued access to EU talent” was an “urgent matter” for British companies.

“While the Government may be ending free movement as we know it, a preferential deal with the EU on what replaces it simply must be on the table,” he said.

Meanwhile, the City of London Corporation has called on the Conservatives to urgently step up talks with EU counterparts, to steer away from a “damaging cliff-edge” that it said would hurt British and European economies alike.

It warned that contract continuity and data-sharing protocols were crucial areas for a settlement to be reached, warning that cross-border insurance and pension arrangements could collapse without an agreement.

The City Corporation’s policy chairman, Catherine McGuinness, who is leading its delegation to the Conservative Party conference this week, said: “negotiations are entering a critical phase.”

Read more: War of words: Former Brexit minister sticks knife into the CBI

“Both the UK and EU urgently need to address issues that could prevent the industry from servicing their clients and, in turn, destabilise markets as well as hitting consumers and businesses on both sides of the Channel,” she said. “It is in neither side’s interests for us to stumble over the cliff-edge and jeopardise financial stability.”

Prime Minister Theresa May is battling to defend her signature Chequers blueprint for negotiations with the EU, as talk of leadership challenges stalk her at the commence of her party’s conference. Last week, her arch-rival within the Conservatives, former foreign secretary Boris Johnson, laid out his criticisms of Chequers – which was rejected by EU leaders last month in a humiliating episode for May.

In a poll of 748 business leaders, the IoD found 41 per cent were “not very prepared” or “not prepared at all” for a no-deal Brexit, with manufacturing firms feeling less ready than those in the services sector.

Respondents were overwhelming negative about the prospect of Britain crashing out without a deal, with 43 per cent saying it would have a “very negative” effect on their business. Just 10 per cent said they felt positive about no-deal. Just under half the respondents said they were waiting for a clearer picture of the outcome of negotiations before they began to implement contingency plans.

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