finance

Business reacts to resignation of David Davis as Brexit minister



David Davis‘s dramatic departure as Brexit minister has had a mixed response from business.

The pound actually rose in early trade on the foreign exchange markets but the CBI said it was “a blow”.

Financial markets responded positively to Davis’s departure with the pound rising to a one month-high.

Sterling was up 0.5 per cent against the dollar at 1.33 and 0.3 per cent higher against the Euro at 1.13.

Connor Campbell, a financial analyst at SpreadEx, quoted by the BBC said: “On the one hand it is odd the pound is in a decent mood, given that the ‘soft’ Brexit plan agreed at Chequers is arguably in doubt following Davis’s disappearing act.

“Yet his resignation does potentially make it easier to implement said ‘soft’ Brexit, dependent on how the next couple of hours and days pan out for PM May.”

But Carolyn Fairbairn, CBI director-general, interviewed on BBC TV, said: “It’s undoubtedly a blow because on Friday there was a ray of light,” she said referring to Friday’s Cabinet Agreement at Chequers.

“Businesses have been wanting to make investment, decisions, they’ve been facing uncertainty for many months, actually since the referendum itself and here was the beginnings of a pragmatic way forward.

“So, it’s all about what happens next.

“It was also a ray of light because business voices had clearly been heard, the importance of frictionless trade was recognised, so we will be watching what happens next; it is a race against time now.”

She went on: “The most important thing for business at the minute is that we have a shared Cabinet position so that we can go to the European Union and negotiate.

“We’ve had two years to get to this point and we’ve got two months now to negotiate this with Brussels. So, Cabinet unity is the most important thing so that’s what we hope will hold over the next few days.”

Fairbairn said that businesses want a close relationship with Europe following Brexit.

“We’ve been taking evidence from across the country for months now and they really value the close relationship with Europe. No-one wants to run two factory production lines; they value having a common rulebook. So that was step forward, a pragmatic step forward.

“I think that what we’re looking for now if for Europe to engage on the other side so that we can find a solution to this before the clock runs out in March.”

But Fairbairn reiterated the CBI’s position that it is not against the UK’s departure from the EU.

“It’s about the balance that is struck. We are leaving, the business community completely recognises that.”

She said that “good Brexit would work for jobs, investment and growth and that frictionless trade with the EU would be important for the likes of manufacturers and food producers.

“We will be doing some things differently in the future, there are some important changes but frictionless trade – all the evidence shows how important that is.”
She added: “And one of the things businesses will want to see over the next few days is the detail behind that customs arrangement to check that it works.

“Things will be different in the future but what we want is a Brexit that is going to enable our businesses to continue to invest and thrive”

She stressed that the type of Brexit would hugely influence future business investment. “Those decisions about a new headquarters, a new factory, a new production line have been put on hold. I don’t think they’re going to be unblocked this morning, that is why it is a blow but the Prime Minister showed real leadership on Friday in getting to a position of unity.

“We think this is a time for people to pull together in the national interest, not just here in the UK but in Brussels as well; I’m going to be speaking to one of the lead negotiators later on this morning and really saying it is time for them to engage and to meet s half way on these negotiations so that we get an outcome, because actually it’s in the interests of jobs across Europe and not just in the UK.”



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