Brexit vote defeat for May brings 'catastrophic' no-deal even closer, warn businesses

Business leaders have warned Britain is getting closer to “no-deal chaos” after Theresa May’s Brexit strategy suffered a humiliating defeat in Parliament.

Several senior figures in UK business hit out at politicians over the ongoing deadlock in the Commons, with uncertainty hugely disruptive for firms but set to continue after MPs voted down Mrs May’s plans.

Carolyn Fairbairn, director general of the Confederation of British Industry (CBI), tweeted: “Another day of failed politics, another day closer to no deal chaos. Politicians must find a deal that protects our economy. Failure would be unforgivable.”

Ian Wright, chief executive of the Food and Drink Federation, warned: “The defeat of the government motion tonight will increase fears among food and drink manufacturers that there is now a diminishing prospect of rescue from the catastrophe of a ‘no-deal’ Brexit.”

READ MORE: Theresa May defeated in latest vote as Brexiteers rebel

Many businesses feel completely under-prepared for the significant disruption likely if Britain leaves the EU on 29 March without securing any agreement with its biggest trading partner.

A no-deal Brexit is seen as the worst possible scenario for business, with fears that abandoning existing trade rules immediately could spark huge border delays, product shortages, price increases and a significant threat to jobs.

The pound fell to a one-month low against the dollar shortly before today’s vote, as investors began to suspect Brexiteers would inflict a damaging defeat on the government.

Colin Stanbridge, chief executive of the London Chamber of Commerce and Industry, said the British economy was suffering already from the uncertainty as the clock ticked down to Brexit.

“Businesses are crying out for politicians to stop grandstanding, agree a way forward, and move on to the future trading negotiations with the EU,” he said.

READ MORE: Brexiteer MPs accused of ‘treachery’ by business minister

Nicole Sykes, lead official on EU negotiations at the CBI, added: “I watch every one of these Brexit votes – even those with inevitable outcomes – with goosebumps up my arms.

“With so much at stake, these are chances for MPs to show businesses in their constituencies that political leadership is still alive. These chances are squandered every time.”

Labour leader Jeremy Corbyn accused the prime minister of “running down the clock” after today’s vote, pressuring MPs to choose between her deal and leaving without a deal.

But a Downing Street spokesman accused Corbyn of making a no-deal Brexit “more likely” and undermining negotiating strategy in the vote.