Extension must deliver Brexit circuit breaker

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Leaders have responded to news that the UK and the EU have agreed a “flexible extension” of Brexit until 31 October.

National Chairman of the Federation of Small Businesses (FSB) Mike Cherry said: “After already facing two potential cliff-edges, on March 29 and April 12, small businesses are being asked to wait and see all over again whether they might face another.

“Extensions do avoid a cliff-edge in the short term, and dodging the economic harm of no-deal at 11pm tomorrow will be a huge relief for many small businesses. What is a problem, however, is that these extensions provide no comfort that there will be an end to the debating, dithering and delay.

“They also eat into the length of the transition period which small firms desperately need if they are to have enough time to prepare for whatever changes they will need to post Brexit. By October 31, a third of the planned transition period will have been lost. Unless we get a political consensus, all a further extension does is create even more uncertainty which is driving small firms to despair.

“Frankly, they are fed up of being made to pay the price for the political crisis that has engulfed Westminster. We have seen some cross-party engagement in recent days to try and end the stalemate. There should be no let-up in attempts to deliver the circuit breaker needed to secure a solution to this crisis.”

Carolyn Fairbairn, CBI Director-General, said: “This new extension means that an imminent economic crisis has been averted, but it needs to mark a fresh start. More of the same will just mean more chaos this autumn.

“Businesses will today be adjusting their no deal plans, not cancelling them.

“For the good of jobs and communities across the country, all political leaders must use the time well.  Sincere cross-party collaboration must happen now to end this crisis.”

Edwin Morgan, Interim Director General of the Institute of Directors, said:

“Confirmation of a further extension removes the immediate threat of no deal, but will bring little comfort for businesses when so much remains up in the air.

“Firms don’t want to see more of the same. They want to see politicians build consensus around a way forward that finally breaks the cycle of indecision.

“Westminster absolutely cannot feel the pressure is off now, quite the opposite, we need an increased sense of urgency towards finding a solution.”

Amanda Tickel, Global Brexit Lead at Deloitte, said: “Business reaction to a further extension is muted – on the plus side it removes an immediate unknown. But those that have extensively prepared, for two different dates already, are frustrated to now have a third date to work towards.

“Prolonged uncertainty is continuing to delay investment, with cash reserves running high at some of the biggest U.K. businesses. Regulated sectors such as financial services and pharmaceuticals have already had to move parts of their business or functions to other EU countries as a result of regulatory pressure to be prepared so they now face a further period of limbo.”