Brexit fundamentalists have destroyed the Tories’ reputation as the party of business

Tim Farron
Liam Fox and David Davis
The Brexiteers don't have a well-thought-out strategy (Source: Getty)

The Conservatives used to pride themselves on being the party of business. Now that legacy is being turned on its head, as Theresa May moves closer towards a disastrous hard Brexit that would send Britain hurtling out of the Single Market.

While businesses clamour for an end to the huge uncertainty they face, the government endlessly repeats that it will not “provide a running commentary” to avoid answering key questions over Britain’s future trading relationships.

It is becoming clear the Conservative Party no longer understands the need for calm, economic pragmatism. Instead it has been taken hostage by Brexit fundamentalists whose protectionist fantasies will always trump the needs of business, including maintaining close economic ties with our biggest export market.

Nowhere is this change of direction more clear than at this week’s Conservative Party conference. You might once have expected a Tory Prime Minister’s speech to be music to the business community’s ears. But May’s announcement on Sunday was enough to send the pound hurtling to a three-year low against the euro. She made clear that cutting immigration will be prioritised over retaining full access to the Single Market. For the City, that would almost certainly mean UK banks and financial institutions losing passporting rights to the EU internal market.

Theresa May at Conservative Party conference
The Prime Minister's speech sent sterling plunging (Source: Getty)

Unless the government changes course, London’s status as Europe’s financial capital is set to be sacrificed on the altar of hard Brexit. That would be disastrous for jobs, the broader economy and the £66bn of tax revenue the financial services sector generates for the exchequer each year.

Read more: Leaving the Single Market would blow a £14bn hole in the public finances

Unfortunately, the three Brexiteers charged with negotiating the UK’s exit from the EU seem to have little understanding of the economic precipice we find ourselves dangling over.

Liam Fox, not content with calling British businesses fat and lazy, has claimed that UK trade with the EU will be “at least as free” after Brexit as now. But by definition we cannot possibly have better trading terms with the EU after Brexit than we enjoy now.

David Davis was reportedly unfazed over the prospect of 75,000 job losses in the financial sector, while Boris Johnson recently argued that “our policy is having our cake and eating it,” hardly the signs of a well-thought-out strategy that is taking on board the concerns of business.

But Brexit is only one part of the Conservative agenda that is harming businesses’ ability to grow. Last week, the government announced proposals that will see business rates in the City skyrocket by an estimated £2bn. This comes after George Osborne dropped plans proposed by Danny Alexander during the coalition government to radically overhaul business rates and make them fit for purpose in our modern economy.

Views Of The Ever Changing London Skyline
Firms in the City will have to fork out more in business rates (Source: Getty)

At the same time, May is ploughing on with plans for an Apprenticeship Levy that would equate to a “payroll tax” on firms of around £11.6bn. Instead of addressing the real concerns of thousands of businesses across the UK, the government is burdening them with new and unnecessary taxes.

Read more: The apprenticeship levy could be a disaster

It’s little wonder that May has lost one of her most capable and respected ministers, Lord Jim O’Neill, who resigned as treasury minister last week over concerns about the government’s direction. His departure means the government has lost one of its most pre-eminent experts on the financial services industry.

May has also decided to close David Cameron’s Business Advisory Group, shutting herself off from some of the country’s most important companies. Her actions show the growing gap between this Conservative Brexit government and the views of the business community.

Labour under Jeremy Corbyn may be unable and unwilling to provide a strong, united opposition, but the Liberal Democrats will not stand by as the Conservatives take a wrecking ball to the UK economy. We will be the pro-business voice Britain needs, standing up for free markets, entrepreneurialism and the thousands of firms who rely on unfettered trade with the EU.

Read more: Single Market membership not realistic says McDonnell

We have set out a clear plan for what should come next, including giving the British people a say over the final Brexit agreement through a referendum. In the meantime, we will fight for the best deal possible, including ensuring the City retains full access to EU financial markets.

And on the biggest question of all, Britain’s membership of the Single Market, we will not give up the fight. Nothing is more important to British jobs, prosperity and our economic future.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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