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Approaching a cliff edge? British business begs for clarity after Brexit maelstrom

Reuters  |  LONDON 

By Guy Faulconbridge, Kate Holton and Elisabeth O'Leary

(Reuters) - After the maelstrom of Prime Minister Theresa May's crisis and a struggle in over the shape of Brexit, chiefs have a simple request for Britain: Give clarity on how the divorce might look.

Since May nearly lost her job in a botched June 8 gamble, ministers have sought to strike a more inclusive tone, even inviting in some chief executives to a 17th century manor house to discuss Brexit over a buffet lunch.

But as the March 2019 exit date approaches, six major British chiefs told they still do not have the answers about post-Brexit immigration, trade and regulation they need to plan and make coherent investment decisions.

"I see through a glass darkly. It's hard to discern exactly what is happening at the moment," Rupert Soames, CEO of British outsourcing group Serco, said.

Serco was finding it harder to attract truck drivers in its waste collection in because of a lack of clarity about Brexit, he said. Many were opting instead to work in Spain, Italy or Portugal.

"There has been a bit of a thaw in Number 10, but nothing dramatic," said a FTSE 100 company senior executive who asked not to be named due to the sensitivity of Brexit.

"Before the election, they weren't listening. Now, they're trying to listen, but they have very little of substance to say on the topic that matters far more than any other," the executive said.

Some chiefs also said they were disorientated by a public battle at the heart of over the shape of the divorce, including crucial details such as immigration controls and the length of any possible Brexit transition.

While the stakes are high, time is short.

has less than two years to negotiate the terms of the divorce and the outlines of the future relationship before it is due to leave in late March 2019, though a transition could give businesses more time to adjust to the new relationship.

Still, many chiefs worry that there is ample room for a breakdown in talks and a disorderly Brexit that would imperil Britain's $2.5 trillion economy by sowing chaos through the labour market and trade flows.

The and need to reach agreement on everything from expatriate rights to the complexities of customs to keep trade flowing between the world's biggest trading bloc and the fifth largest global economy.

BREXIT TRANSITION?

FTSE-100 executives said they understood ministers could not give an exact outline while negotiations were under way. But businesses did need to understand the rights of workers and how trade would work the day after March 29, 2019.

May wants to negotiate the divorce and the future trading relationship with the before leaves, followed by what she calls a phased implementation process to give time to prepare for the impact of the divorce.

Britain's pharmaceutical industry needs at least two years' transition to cope with the impact of Brexit, said Emma Walmsley, the chief executive of GlaxoSmithKline.

"Our main focus is to make sure that we are given a sufficiently long transition period, that is really the thing that matters in our sector," she told reporters. "The absolute minimum for us - minimum - is two years."

May has given little detail on the transition she wants but her finance minister, Philip Hammond, has said there should be no immediate change to immigration or trading rules when leaves, and that a transition could last until mid-2022.

But Hammond's vision is opposed by other senior ministers within May's who want a cleaner break with the club joined in 1973.

CLIFF EDGE?

should turn up the pragmatism and tone down the ideology in its Brexit negotiations, Dixons Carphone Chief Executive Seb James told

James, whose company employs around 4,000 citizens from other countries out of a total UK workforce of about 26,000, said May's should give more clarity about the transition period.

"It's not fair on people to not give them some kind of clarity as quickly as possible," James said in an interview at Dixons Carphone's Acton headquarters in west "We need to get that sorted, and we need to get it sorted now."

will in coming days set out its negotiating position on a range of Brexit issues. A source said ministers were engaging with to ensure that Brexit was a success.

Companies seeking clarity are likely to be disappointed until a departure deal is done, G4S Chief Executive Ashley Almanza said.

"(Everyone) is waiting for clarity on how Brexit is going to affect the outlook and I think basically that we're going to know when we get there," said the head of the world's largest security group.

In the absence of clarity from the government, some company bosses said they are planning for the worst - what they call a "cliff edge" Brexit.

"A lot of our businesses are starting to take a more pessimistic view," said one senior executive who spoke on condition of anonymity. "We're pressing all of the time to get clarity but we remain concerned that there's no clarity."

(Writing by Guy Faulconbridge; Additional reporting by James Davey, William James and Ben Hirschler; editing by Alister Doyle)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, August 10 2017. 20:44 IST
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