CBI chief warns UK can never be fully prepared for a no-deal Brexit

Tom Belger. Finance and policy reporter. Yahoo Finance UK•August 19, 2019

Britain can never be fully prepared for a no-deal Brexit’s “incredibly serious” impact on the UK economy, a leading business chief has warned.

Carolyn Fairbairn, director general of the Confederation of British Industry (CBI), said on Monday the alarming scenarios included in a government report leaked on Sunday felt like “plausible outcomes.”

The ‘Operation Yellowhammer’ report said fuel, food and medicine shortages, three months of chaos at ports and a hard border with Ireland were among the “most likely” outcomes, according to the Sunday Times.

Meanwhile the Freight Transport Association, which has been advising the government and working on contingency planning, said the effects in the report were “actually far worse” than even they had expected.

Fairbairn said the leak showed getting a Brexit deal, which would maintain continued closer economic ties, had to be new prime minister Boris Johnson’s “number one priority.”

Securing an agreement required “compromise on both sides,” she added in an interview on BBC Radio 4’s Today programme.

The business chief also said it was impossible to be fully prepared, in stark contrast to Johnson’s claims that many key sectors “will be ready” in his first speech outside Downing Street last month.

“We have become more prepared for the short-term disruption – not fully prepared, I don’t think that can be done. If you have any delays at borders that will be significant.

“What we can’t be prepared for is the long-run impact of a fundamental change in our competitiveness,” she said.

She suggested customs checks would cost the UK and trading partners £20bn ($24.1bn) a year, costs that “cannot be fully mitigated.”

Fairbairn added: “What Yellowhammer shows and businesses have been saying for three years is — the cost is really significant for the economy and jobs, and that a deal is the number one priority.”