UK reeling from coronavirus could be floored by double punch of Brexit

London Letter: CBI leader says business could not cope with failure to reach a deal

Boris Johnson: will not seek an extension to the transition period but he does want a deal with the EU. Photograph: Dominic Lipinski/PA Wire

Boris Johnson: will not seek an extension to the transition period but he does want a deal with the EU. Photograph: Dominic Lipinski/PA Wire

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At the end of its second week back from recess, when Jacob Rees-Mogg put a stop to remote voting and promised a return to business as usual, the Palace of Westminster is still mostly deserted. If anything, there were fewer MPs around the atrium at Portcullis House, which is acting as the parliamentary estate’s village square, this week than last week.

Rees-Mogg’s attempt to bring everyone back to Westminster has been a fiasco and the kilometre-long conga lines of MPs waiting to vote have made him a greater laughing stock than ever. Many MPs continue to take part in debates by video, and speaker Lindsay Hoyle appears to enjoy introducing these contributions like an announcer in the early days of broadcasting.

“We now go to the shadows of Lichfield Cathedral to Michael Fabricant, ” he boomed on Thursday morning, nonplussing for once the veteran Conservative MP.

Hoyle is not an attention-seeking speaker like his predecessor John Bercow but is showing early signs of enjoying the limelight and did nothing to discourage the dozens of MPs who started their contributions on Wednesday by wishing him a happy birthday. Boris Johnson offered his best wishes too but ministers privately blame Hoyle for making the return to in-person voting at Westminster more unwieldy than necessary.

Hoyle has alienated some MPs by banning the sale of alcohol on the estate and the cafes and restaurants are a grim sight, with tables for one scattered far apart. And the two-metre social distancing rule is making life difficult for everyone, whips and plotters alike.

Johnson is under pressure from within his party to reduce the two-metre limit to one metre. But the public are wary and a YouGov poll on Thursday found that 58 per cent of Britain’s want to retain the two-metre rule, compared with 24 per cent who want to reduce it and 8 per cent who want to scrap it altogether.

Everyone around Westminster and Whitehall knows that there will be an inquiry into the government’s response to coronavirus and Johnson’s scientific advisers appear to be alert to the risk that the blame for Britain’s disastrous performance will land on them.

Imperial College’s Neil Ferguson said this week that the death toll could have been halved if Johnson had introduced lockdown a week earlier and chief medical officer Chris Whitty identified the lack of testing in the early part of the epidemic as the biggest mistake.

Whitty and chief scientific adviser Patrick Vallance made clear at their press conference with Johnson on Wednesday that they would not endorse an accelerated exit from lockdown. Vallance pointed out that, although the number of infections was falling, with about one in every 1,000 people testing positive every day, this is twice the level of 50 in every 100,000 people that would trigger a reinstatement of lockdown restrictions in any region in Germany.

Common sense

The risk for Johnson is that a slow exit from lockdown will intensify the economic damage of coronavirus as the OECD warns that Britain is likely to take the biggest hit of any economy in Europe. Unemployment is likely to rise in the next few weeks as companies decide to lay off workers rather than share with the government the cost of furloughing them.

It is in this context that Carolyn Fairbairn, who heads the Confederation of British Industry (CBI), warned that business could not cope with the double punch of coronavirus and failure to reach a post-Brexit deal with the European Union.

“The resilience of British business is absolutely on the floor,” she told the BBC.

“Every penny of cash that had been stored up, all the stockpiles prepared have been run down. The firms that I speak to have not a spare moment to plan for a no trade deal Brexit at the end of the year – that is the common sense voice that needs to find its way into these negotiations.”

Talks with the EU are going badly and there is currently no sign that member states are ready to soften Michel Barnier’s negotiating mandate. Britain’s chief negotiator David Frost miscalculated badly with a punchy speech in February and a subsequent letter to Barnier declaring that there could be no compromise on key issues like the level playing field guaranteeing fair competition.

This was viewed in some European capitals, notably in Paris, as evidence that there was no point in offering compromises because Britain was not ready to make a reasonable deal. Doubts about Britain’s good faith were further fuelled by London’s foot-dragging over the implementation of the Northern Ireland protocol.

Johnson will not seek an extension to the transition period but he does want a deal and Downing Street has lost some of its swagger as it has quietly abandoned a threat to walk away from the talks by the end of this month in favour of more negotiations in pursuit of some kind of compromise. 

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