Brexit leaves the UK in a position of huge uncertainty. If there is one thing that businesses should avoid at all costs, it is uncertainty.
So rather than pledge allegiance for Brexit – as the Government has asked – business leaders must take up their responsibility to warn the Government of the dangers of leaving the EU without a deal, and to speak out about the impact of Brexit.
If the UK leaves the EU without a trade deal, as James Dyson suggests it could, this will be catastrophic for our country, our economy and our citizens.
Striking a final trade deal, or even a transitional agreement, with the EU will protect thousands of businesses, and hundreds of thousands of jobs, in the long term.
No country in the world wants the UK to leave the Customs Union. This would hurt Europe too, as Dyson states. It would also have a major impact on other economies, including India, where Dyson plans to begin trading later this year.
The reality is that we have had the best of both worlds as part of the EU. We have been able to trade freely with our closest partners, yet we are not part of the Euro and we are not part of Schengen.
The UK has grown faster cumulatively than any of the original EU nations, with a cumulative GDP growth rate of 62 per cent since the EU was formed – higher even than Germany at 35 per cent.
Accepting World Trade Organisation terms when we leave the EU – including a 10 per cent tariff on trade in cars and up to 200 per cent on some agricultural products – will be a disaster for UK businesses and for the economy.
The UK naturally trades most with its closest partners. Liam Fox, Boris Johnson, David Davis and their band of Brexiteers want to sacrifice our trade with Europe to go after free trade agreements with countries representing little more than a quarter of our world trade. This is madness – there is no way this plan can work.
We already have the ability to trade freely with the EU, collectively the UK’s largest trading partner, accounting for 47 per cent of our exports and 54 per cent of our imports.
On top of that, thanks to Free Trade Agreements (FTAs) that we already have through our membership of the EU – with countries such as South Africa, Norway and Egypt – we can trade freely with markets that account for a further 17 per cent of our trade.
Now, the EU has just succeeded in securing an FTA with Japan, meaning that over 70 per cent of our global trade is thanks to Free Trade Agreements with or thanks to the EU!.
Leaving the EU Customs Union would draw a customs border between the UK and the EU, the largest free trade bloc in the Western world, right on the UK’s doorstep.
This is a huge risk, which will lead to a cliff-edge of uncertainty. Many in the Brexit camp might say speaking up on this uncertainty is negative or damaging to the negotiations – but we must be honest and face facts and call out what is plain to see.
Creating uncertainty for UK’s business landscape is negligent, it risks loss of jobs and investment. Just look at the evidence – businesses that have already curbed investment in their headquarters in the UK. Easyjet, for example, has already said that it plans to set up a continental base in Austria, so that they can continue to operate flights within the EU.
The uncertainty in the automotive manufacturing industry, which supports a huge number of high-value UK jobs, has already taken a huge toll. Tariffs on automotive manufacturers could be imposed multiple times across production processes, owing to the close integration of the UK and the EU supply chain. Investment in the automotive industry has slumped from £1.66 billion in 2016 to just £322 million in the first six months of this year, according to the Society for Motor Manufacturers and Traders, boding ill for the growth of UK car manufacturers.
Trade deals are not easy to secure. They take years to negotiate. Trade deals are not just about tariffs and duties, they are also about the freedom of movement and loosening border restrictions, including for international students.
The Government and the Brexiteers in charge cannot be allowed to get away with misleading the country the way they have done up until now.
Businesses must stand up for the best possible deal for the UK economy, for our citizens and our country, even if this means not leaving the single market.
The business community should not be afraid to be bold and even go as far as to call for Article 50 to be unilaterally revoked if the UK cannot secure a fair deal.
It appears more and more likely that once the British people see that the Brexit Emperor has no clothes, they will demand that the UK remains in the U.K. for the sake of our citizens, our businesses and our country.
Lord Bilimoria is the founder and chairman of Cobra Beer, Chancellor of the University of Birmingham and the founding Chairman of the UK-India Business Council.