Industry body says firms have already sent hundreds of millions of pounds out of UK

This article is more than 1 year old

This article is more than 1 year old

Businesses are in “despair” over Brexit and have already diverted hundreds of millions of pounds in investment out of the UK, the Confederation of British Industry has said.

The CBI deputy director general Josh Hardie said companies around the country, who did not seek publicity, had already pressed the button on contingency plans for no deal.

“What has happened this week is that contingency plans have now been triggered,” he said.

A CBI survey shows that 80% of members have already reduced investment because of Brexit and 97% of those with contingency plans will be pressing the button on those plans by Christmas.

Businesses have been watching the political meltdown and have little faith clarity is around the corner after this week’s Westminster chaos, the CBI believes.

“I know of one food processing company who has been waiting for planning permission for five years. It has just got the permission but has has decided now not to go ahead because of the threat of no deal. This would have been a major investment and hundreds of jobs,” said Hardie.

“Some of these decisions are reversible, but the worrying thing is that a huge number of companies are just making the investment elsewhere. They cannot wait.

“The idea that there is a massive wall of money being saved up for April when we know what is going to happen, is just wrong. It has already gone elsewhere.

“We are talking hundreds of millions of pounds. We are talking tens of millions for some individual companies.”

The CBI director general, Carolyn Fairbairn, described Wednesday night’s vote on Theresa May’s leadership as a “chaotic detour” that showed a complete disconnect between the Westminster bubble and business.

“Uncertainty is throttling firms and threatening jobs – not in the future but right now,” she said.

She said businesses were “counting on politicians”.

The CBI’s concerns were echoed by the Institute of Directors which said business leaders were “tearing their hair out” at the current state of negotiations.

“The last thing businesses needed today was even more uncertainty – and yet politics has managed to deliver on that once again,” said Stephen Martin, its director general.

The British Chambers of Commerce called on politicians to “redouble efforts” to stop a no-deal Brexit happening. “There is not time to waste,” said their director general, Adam Marshall.

Hardie said manufacturing businesses were among the first to be hit as they were being forced into contingency plans now involving stockpiling and warehousing.

Car companies were also being hit with just-in-time production systems forcing them to seek extra parking facilities in the event that lorries loaded with components could be stored.

Last week a senior executive from Toyota told a select committee that the company had no warehousing facilities such was its reliance on the just-in-time production process.