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Hard Brexit Would be Disastrous: German Industry

Britain crashing out of the European Union without a divorce deal would have disastrous consequences for companies and workers in Britain and across Europe, the head of the BDI German Federation of Industry said on Saturday (17).

Britain's prime minister Theresa May is fighting to defend a draft deal agreed with the EU but opposition from both within and outside her party has raised the possibility of a no-deal hard Brexit or even another referendum.


Dieter Kempf told Funke Mediengruppe newspaper chain that a no-deal Brexit would hit the automotive, aerospace, chemical, pharmaceutical, engineering and electrical industries particularly hard. But service industries including banking and tourism would also be affected.

"A hard Brexit would be disastrous," Kempf said, adding that German firms should prepare for a no-deal exit of Britain from the European Union.

"It would cause great difficulty for tens of thousands of companies and hundreds of thousands of workers on both sides of the English Channel," he said.

More than two years after the United Kingdom voted to leave the EU, it is still unclear how, on what terms or even if it will leave as planned on March 29, 2019.

Opponents of the agreement with the European Union, which still has to be approved by the British parliament, say it is the worst of both worlds, leaving the bloc with too much power over Britain while taking away its say in making the rules.

Kempf said German industry and government should brace for further uncertainty in coming months.

"I appeal to the lawmakers in the British parliament to be conscious of their responsibility," he said. "The ball is in London's court ... New negotiations are not the answer."

Reuters

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  • Family businesses make up 90 per cent of UK private firms and employ 13.9 m people.
  • Nearly 50,000 businesses now in critical financial distress, up 21 per cent year-on-year.
  • Ethnic minority businesses contribute £74 bn annually despite facing funding barriers.
Family-owned companies, the backbone of Britain’s private sector, are warning that looming inheritance tax reforms could cripple investment, drive jobs overseas, and weaken an economy already battling rising financial distress.
Ranjit Singh Boparan started with a small bank loan and a butcher’s knife. Today, his 2 Sisters Food Group employs 25,000 people and supplies chicken and ready meals to almost every major UK supermarket. He notes that family businesses like his have been forgotten by the government.

“To get the UK economy going you’ve got to use family businesses as the backbone of it, not the BlackRocks or the Vanguards,” Boparan told The Times. He says overseas investment giants “will come in, they will take and they will go. He adds they have no allegiance to the country.” Boparan describes the proposed changes as “horrific” for family businesses and warns they threaten food security as companies think twice about investing.

Family firms make up 90 per cent of all private sector companies in the UK and employ 13.9 million people. These businesses contributed £575 billion to the economy in 2020, accounting for 51 per cent of all private sector employment.

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