UK businesses 'horrified' at plans for no-deal Brexit

British firms were “watching in horror” as political infighting was being put ahead of securing a Brexit deal, five major business groups said on Wednesday.

In a joint statement, they warned that the lack of progress in Westminster was increasing the prospects of a no-deal Brexit.

The intervention came as Cabinet ministers agreed to a ramping up of preparations for a no-deal Brexit, including putting 3,500 armed forces personnel on standby.

A vote on Prime Minister Theresa May’s deal is not due until mid-January in the face of stern opposition from Conservative MPs. Ministers agreed to allocate an extra £2bn to 25 Whitehall departments to get ready for Brexit.

The five business organisations – the CBI, Institute of Directors, British Chambers of Commerce, Federation of Small Businesses and the manufacturing body EEF said firms of all sizes were “reaching the point of no return, with many now putting in place contingency plans that are a significant drain of time and money”.

“Firms are pausing or diverting investment that should be boosting productivity, innovation, jobs and pay into stockpiling goods or materials, diverting cross border trade and moving offices, factories and therefore jobs and tax revenues out of the UK.”

“With just 100 days to go, the suggestion that ‘no-deal’ can be ‘managed’ is not a credible proposition. Businesses would face massive new customs costs and tariffs. Disruption at ports could destroy carefully built supply chains.

“This is not where we should be. “The responsibility to find a way forward now rests directly with 650 MPs in Parliament.”

The call for unity may have fallen on deaf ears as overnight the SNP, Liberal Democrats, Plaid Cymru and Greens and tabled a vote of no confidence in the government.

The parties criticised Labour leader Jeremy Corbyn for his failure to demand a full no-confidence motion in the government.

Corbyn tabled a motion of no confidence in May on Monday, which has no hope of being allotted parliamentary time for a debate and vote. SNP Westminster leader Ian Blackford accusing the Labour leader of being happy to let Theresa May use delaying tactics to avoid a vote on her deal.

“This is not acceptable and people deserve better,” he said.

NEW IMMIGRATION CONTROLS

In a separate announcement, the government said low-skilled workers from EU countries would no longer have the automatic right to work in the UK after Brexit, under proposed new immigration rules.

Home Secretary Sajid Javid said the plans would not include a "specific target" for reducing numbers coming into the UK. May has been obsessed with cutting migration, making it one of her non-negotiable "red lines" in Brexit talks.

Asked repeatedly in a BBC interview if the government was sticking to its manifesto commitment to bring annual net migration down to the tens of thousands, Javid would only say "the objective is to bring net migration down to more sustainable levels".

Under the proposals, the £30,000-a-year minimum salary threshold that is already imposed on non-EU workers will also apply to migrants from the EU27.

EU net migration hit a six-year low as more European citizens left the UK after the Brexit vote, the Office for National Statistics reported last month.

Estimated net long-term migration to the UK from the EU was 74,000 in the year to June 2018, the lowest level since 2012. Non-EU net migration was 248,000 driven by increases in immigration for both work and study, particularly of Asian nationals.

Overall net migration was stable at 273,000 in the past year, well above the government’s controversial target of less than 100,000.

EC UNVEILS ACTION PLAN

The European Commission announced that it was implementing its no-deal contingency plan, adding that the UK will not have a say in the measures that could be introduced to minimise the disruption caused by a no-deal Brexit.

It said the temporary measures would be adopted unilaterally by the EU in areas including financial services, air transport, customs, and climate policy, amongst others.

"Today’s package includes 14 measures in a limited number of areas where a 'no-deal' scenario would create major disruption for citizens and businesses in the EU27."

The commission said it considers it "essential and urgent to adopt these measures today" to ensure that the contingency measures can be up and running on the 30 March Brexit date "in order to limit the most significant damage caused by a 'no-deal' scenario in these areas".