LONDON – Business leaders expressed alarm on Thursday as a draft Brexit agreement seen as the only chance of preserving some stability in UK-EU trading relations threatened to unravel, sending stock prices and the pound plunging.
Just 12 hours after British Prime Minister Theresa May announced that her cabinet had agreed to the terms of the draft agreement, Brexit minister Dominic Raab and work and pensions minister Esther McVey quit, saying they could not support it.
Their departures and those of other, junior ministers, revived the spectre for business of Britain leaving the EU without a deal next March, and sent shares in British housebuilders, retailers and banks tumbling.
“The situation this morning saps the confidence of the City and the country,” said Martin Sorrell, former chief executive and founder of ad agency group WPP and one of Britain’s best-known businessmen.
The EU is Britain’s biggest trading partner, accounting for 44 percent of UK exports and 53 percent of imports to the UK.
After 45 years of membership, industries including defence, cars and aerospace have created intricate supply chains that rely on smooth, “just-in-time” delivery of thousands of parts across the sea that divides Britain from the continent.
Business leaders fear that the country could stumble towards a no-deal Brexit where border checks block ports and fracture the supply chains that support the likes of Rolls-Royce and BAE Systems.
A senior executive at one of Britain’s biggest banks said this was the most disastrous government he had ever seen.
“The rest of the world is looking at us and laughing. When I travel everyone wonders whether we have gone completely mad,” he said. “It is time to have some stability so business can get some certainty. This is what the country needs.”
Industry bosses who had been briefed on the draft agreement by ministers late on Wednesday had broadly welcomed it as the best chance of a compromise that would secure a transition period and avert the chaos of no deal at all.