Big Four audit giant dragged into Brexit row

Hayley Kirton
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The UK voted to leave the European Union on 23 June (Source: Getty)

Number 10 has today scrambled to distance itself from the details of a leaked memo which warned government was lagging behind on its Brexit plans.

The leaked document, which was produced by professional services giant Deloitte and obtained by the Times, claimed government may need to take on as many as 30,000 additional staff members to deal with its 500 Brexit-related projects.

The memo also warned the general lack of planning meant businesses could easily "point a gun at the government's head".

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Treasury Select Committee chair Andrew Tyrie noted that these revelations, combined with the lack of clarity surrounding what precisely government had done to reassure car manufacturer Nissan into continuing operations in Sunderland, sent out the wrong message.

"The government can and should set out its objectives for the negotiations, and sooner rather than later," Tyrie said. "By doing so it can allay concerns – fuelled by periodic leaks from Cabinet committee meetings and by [the] memo – that it is still unsure about them."

However, a spokesperson for Prime Minister Theresa May slammed the memo, saying it had "no credence".

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"It is an unsolicited document that has nothing to do with the government at all," the spokesperson is reported by Reuters as saying. "It was not commissioned by the government, it was produced by an individual from an external accountancy firm, who was not working for government."

A Deloitte spokesperson confirmed: "This was a note intended primarily for internal audiences. It was not commissioned by the Cabinet Office, nor any other government department, and represents a view of the task facing Whitehall."

Anthony Walters, head of policy at the Association of Chartered Certified Accountants, told City A.M. the comments from Downing Street felt "like a bit of a knee-jerk reaction".

"Government should be looking to reach out to draw in the experts," Walters added.

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Iain Anderson, executive chairman at City public affairs giant Cicero Group, told City A.M. that such research will generally be a help, not a hindrance, to securing the best Brexit deal, particularly given how "fiendishly complex" the negotiations were likely to be.

"The more that adds to the analysis that government can draw on, the better," Anderson said.

Meanwhile, Open Europe's senior policy analyst Vincenzo Scarpetta cautioned that firms should not panic over the report, noting that May had already set generous deadlines for key Brexit milestones, such as triggering Article 50, to give her and her team adequate time to prepare.

"The message [about government being underprepared] that has come across is a bit unfair," Scarpetta said.

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Allie Renison, head of EU and trade policy at the Institute of Directors, added:

We're not surprised that the Government is still in the midst of consultation with business and a wide range of stakeholders, and yet to develop an uniform strategic approach to Brexit negotiations. It is important for the PM to ensure that there is cross-Whitehall consensus between civil servants and ministers about the policy direction of travel.