British government urges major companies to sign public letter backing its Brexit strategy

The letter is being circulated among FTSE 100 companies, but some are reluctant to be dragged into politics

PUBLISHED : Thursday, 07 September, 2017, 12:43pm
UPDATED : Thursday, 07 September, 2017, 9:26pm

The British government has asked FTSE 100 companies to sign a public letter endorsing its Brexit strategy, four sources familiar with the matter said on Wednesday, risking further strains with firms who are reluctant to agree.

Britain’s vote last year to leave the European Union has damaged relations between major companies and the government, with businesses increasingly concerned that moves to leave the single market and customs union would damage their operations.

On Wednesday, many were alarmed at a leaked government report that set out plans to curb immigration for lower skilled workers while others have complained that they have little visibility of how Brexit will unfold.

“We believe this is a good time for employers to work with government and parliament to make a success of Brexit and secure a bright future for our country,” said the letter, circulated to FTSE 100 companies.

A spokesman for Prime Minister Theresa May declined to comment but said there had been lots of engagement with companies over Brexit.

It is not the first time a government has asked big business to lend its support, with high profile figures previously signing letters published in national newspapers that backed the policies of former prime minister David Cameron.

“We welcome the government’s commitment to negotiating an interim period so that firms can ensure they are ready to adapt to the changing relationships and thrive under the new partnership being created with the EU,” it adds.

One source said the Brexit letter was received last Thursday and said the government hoped to publish it as early as this Thursday. The source, who said they had not decided whether to sign, added that the contents often change as companies agree to comply.

We are very reluctant to be dragged into politics at the best of times. Right now we don’t want to endorse a plan that is going to do enormous damage to our industry
FTSE 100 company executive

Another source said they had also read the letter. Two other sources said they were reluctant to commit.

“This certainly raised a few eyebrows,” said a FTSE 100 executive, who is in regular talks with the government. “We are very reluctant to be dragged into politics at the best of times. Right now we don’t want to endorse a plan that is going to do enormous damage to our industry.

The second source said they had “no appetite to sign”.

Jonathan Reynolds, City spokesman for the opposition Labour Party, described the government as “desperately trying to canvass support” for its Brexit negotiations.

“It’s telling and alarming that business leaders have so little confidence in this government’s approach that they are reluctant to sign even this lukewarm statement,” he said.

May’s flagship piece of Brexit legislation will be debated for the first time Thursday, giving opponents an opportunity to lay out their objections in Parliament. But they’re unlikely to derail the government’s plans – for now.

As if negotiating Britain’s divorce with the European Union wasn’t enough, Brexit Secretary David Davis also needs to steer the bill through the House of Commons to ensure that all EU law is copied and pasted into British legislation. Opening the debate Thursday, he will promise to work with opposition parties – and the pro-EU faction within the governing Tory party – to ensure all rights currently enshrined in EU law will be replicated after Britain leaves.

“We are not rejecting EU law, but embracing the work done between member states in over 40 years of membership and using that solid foundation to build on in the future, once we return to being masters of our own laws,” Davis will say, according to his office. “If anyone in this house finds a substantive right that is not carried forward into UK law, they should say so.”

With the Labour Party saying it will vote against the bill at the end of the so-called second-reading debate Monday, and the Scottish National Party and Liberal Democrats also opposing the measure, Davis’s main task is ensuring they don’t tempt enough dissenters from his own Conservatives to defeat the government.

Additional reporting by Bloomberg