Business groups in warning over 'cliff edge of uncertainty' amid exit from EU
Jobs and investment will be hit if business is left on a "cliff edge of uncertainty" over the UK's exit from the European Union, the Government is being warned.
Business groups urged ministers to make sure there is no "vacuum" between withdrawal terms being agreed and a new trade deal being enacted.
The starkest warning came from the EEF, which made it clear that walking away from the EU with no deal in place was not an option.
Dame Judith Hackitt, who chairs the manufacturers' group, will tell its annual dinner in London tonight: "Uncertainty and confusion will result in business being left on a cliff edge. While the Prime Minister has warned of walking away and, that no deal is preferable to a bad deal, that is not an option that business can accept because no deal means prolonged uncertainty and confusion.
"We simply have to avoid the UK departing in haste if we want to avoid spending the next 30 years repenting", she is expected to say.
"What we must have is a deal that ensures our economy continues to thrive and is not sacrificed on the altar of satisfying assumed expectations in a referendum vote. That means a settlement that allows us to continue investing and creating the high-value jobs our economy will need in the future."
The Institute of Directors put forward proposals for ensuring a "smooth and orderly" exit from the EU, although it warned its members to prepare for the cliff-edge scenario in which no trade deal is agreed.
The business group asked for a commitment from politicians on all sides to rule out a second referendum on EU membership in the next Parliament.
It also called for the Government to immediately guarantee that the three million EU citizens living in the UK will be able to stay after Brexit, pointing out that 40% of IoD members employ EU nationals.
Director general Stephen Martin said: "British businesses want to make Brexit work, and are keen to explore trade opportunities with the rest of the world that arise once we leave the EU.
"But the first priority must be ensuring the exit process is as smooth as possible. That means avoiding a vacuum between the withdrawal agreement being settled and a new trade deal with the EU coming into effect.
"The Government must maintain business confidence through consistent communication that they are working to avoid a 'cliff-edge' scenario, where the UK has to fall back on World Trade Organisation rules for trading with the EU."
A Department for Exiting the European Union spokesman said: "We've made it clear we will pursue a phased process of implementation, where necessary, to prevent a disruptive cliff edge for all our businesses.
"Britain is a market for £290 billion a year of European exports and it is in no-one's interests for there to be a threat to stability.
"We want to reach an agreement about our future partnership by the time the two-year Article 50 process has concluded."