March 14, 2019 / 3:12 PM / 3 months ago

UK ministers ask firms to drum up support for May's Brexit deal - executive

LONDON (Reuters) - British government ministers have asked executives at leading companies to use their influence to boost support for Prime Minister Theresa May’s Brexit deal, one of the executives said, as a deadline looms for Britain to leave the European Union.

Britain's Prime Minister Theresa May speaks in Parliament following the vote on Brexit in London, Britain, March 13, 2019. UK Parliament/Mark Duffy/Handout via REUTERS

The request to give backing to the deal — which has already been rejected by parliament twice but looks set to be put to a third vote — was made in a conference call on Brexit on Wednesday that was “uncomfortable” and “awkward”, said the executive, who spoke on condition of anonymity.

Business minister Greg Clark, junior trade minister George Hollingbery and Jim Harra, a senior official in the UK tax office, asked business leaders on the call to try to persuade the Northern Irish Democratic Unionist Party (DUP) and other lawmakers to swing behind May’s position, the executive said.

A Treasury official declined to comment on the details of the call.

Britain is due to leave the world’s largest trading bloc in just over two weeks but has no firm divorce agreement yet.

On Wednesday, lawmakers voted to rule out leaving without a deal, but it is still far from clear what Brexit, potentially the biggest change to Britain’s business environment in almost 50 years, will mean, and firms are clamouring for certainty.

Earlier on Wednesday, the government said it would remove tariffs on many goods coming into Britain in the event of a no-deal Brexit, exposing domestic producers to more competition.

But British exporters would face new trade barriers in the European Union and beyond.

Ministers indicated on the call that financial support would be available for companies threatened with closure due to the changes in import tariffs after Brexit, the executive said.

A government source said they did not recognise that interpretation of the contents of the call.

Finance minister Philip Hammond has said he has nearly 27 billion pounds of “fiscal headroom” that he could use to help Britain’s economy cope with the shock of a no-deal Brexit, but the executive said government help might come too late:

“I’m afraid that, for some businesses in our supply chain for example, the businesses will fail before the help gets there.”

May’s minority government needs DUP support to survive - but the DUP’s 10 lawmakers oppose her Brexit plan.

They say May’s deal opens the possibility of Northern Ireland, which shares a land border with EU member Ireland, being treated differently from the rest of the United Kingdom.

On the call, a Northern Irish beef farmer said he sent meat across the Irish border to be processed in the Irish Republic before shipment to Britain. After a no-deal Brexit, that meat risked being subject tariffs each time it crossed the border.

Hollingbery, the junior trade minister, described the situation as “sub-optimal”, and there was an awkward silence, the executive said.

(The story corrects to show, in paragraph 10, that the government source who did not recognise interpretation of the call was referring to financial support for companies, not to efforts to win over lawmakers. )

Reporting by Elisabeth O'Leary; additional reporting by William James; Editing by William Schomberg, Georgina Prodhan and Kevin Liffey

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