British business leaders are stepping up their Brexit-related demands, seeking to capitalize on last week’s election which saw Theresa May’s ruling Conservatives weakened and denied an outright parliamentary majority.
They are lobbying for the government to negotiate a much closer relationship with the European Union than previously planned by the embattled May, who appears determined to cling to power, at least in the short term, in the face of fury in the party over last week’s election result.
“We must have access to the European market — it is our biggest trading partner,” said Stephen Martin of the Institute of Directors, a lobbying group for business leaders. Business confidence has plunged since last Thursday’s upset election amid signs of a sharp economic slowdown, and company bosses blame uncertainty over the make-up of the government and over Brexit, according to a survey taken by the institute of its members.
“It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders, and the consequences could — if not addressed immediately — be disastrous for the UK economy,” said Martin. Nearly 72 percent of IoD members said “reaching a new trade agreement with the EU” should be the highest priority of the new government.
Business leaders, who view the election result as a rebuff of May’s “hard Brexit” plan, are urging the prime minister to confirm quickly the residency rights of three million European nationals already living in Britain, arguing they are crucial for key sectors of the British economy. They also at the very least want non-tariff access to the Single Market.
Airbus, the aerospace giant, has laid out non-negotiable demands to the government on Brexit, including freedom of movement of their workers and maintaining regulatory harmonization with the EU, warning that if the demands aren’t met production will be shifted overseas. The company employs 10,000 workers in Britain and says another 100,000 British jobs are dependent on Airbus remaining in the country.
But as business leaders demand a rethink of Brexit, it remains unclear what direction the twisting and turning May will take. The moves she has made so far to shore up her precarious position are sending mixed signals.
In a bid to stave off a leadership challenge, May has avoided making major changes to her Cabinet, leaving those most likely to challenge her for the leadership in the positions they held before last week’s election. Before the election she’d planned a major cabinet shake-up.
But she has brought into the Cabinet arch-Brexiter Michael Gove, while at the same time promoting longtime friend the pro-EU Damien Green to act as her deputy. It appears that May is searching for a way to balance the demands of moderates and hard Brexiters in a desperate bid to cling to power.
But threading the needle isn’t easy. She isn’t being helped by her Brexit minister, David Davis, who when asked in a television interview Monday whether the government should now listen to business and pursue a softer break with Europe insisted the hard Brexit plan hadn’t changed.
In a TV interview Sunday, Michael Fallon, the defense minister, had indicated the reverse, saying: “We want to work with business on this.”
In search of alliances
Senior party figures outside the Cabinet maintained a drumbeat of disapproval of May Monday, predicting she would have to leave shortly. Anna Soubry, a former minister who campaigned last June for Britain to stay in the EU during the Brexit referendum, said May’s position was “untenable.”
And Chris Patten, a former Conservative Party chairman, was highly critical of the parliamentary voting alliance May is concluding with Northern Ireland’s Protestant fundamentalist Democratic Unionist Party to boost her minority government, describing it as “lamentable.” “These are not people we can trust,” he said.
The ten Unionist lawmakers will give May a slight working majority in the House of Commons.
There are mounting fears that the voting alliance with the DUP risks unraveling the Northern Ireland peace process, which relies on the British government acting as a neutral broker between the DUP and the Catholic nationalist Sinn Fein.
Irish Republicans condemned Monday the voting arrangement being discussed between the DUP and the Conservatives, warning it would “end in tears.” Northern Ireland has been without a devolved administration for three months following the collapse of power sharing as a result of disputes between the DUP and Sinn Fein.
May was due late Monday to appear before the 1922 Committee, a gathering of backbench Conservative lawmakers. It will be crucial for her to convince the party she should stay on — at the very least to avoid another election or to give an opening to the Labour Party to form a minority government instead.