U.S. business asks British PM May: how bad can Brexit get?

FILE PHOTO: British Prime Minister Theresa May speaks at "Call to Invest" African roundtable Inc. on the sidelines of the 73rd session of the United Nations General Assembly at U.N. headquarters in New York, U.S., September 25, 2018. Peter Foley/EPA-EFE/Pool via REUTERS

NEW YORK (Reuters) – British Prime Minister Theresa May was reminded of how worried businesses are about Brexit on Wednesday when a rallying speech to executives in New York was met with a single stark question from the floor – just how bad can things get?

May assured her audience that Britain would flourish after Brexit and remain an attractive place to invest, seeking to ease concerns about the country’s future after it leaves the European Union next March.

She said she was confident that Britain would be able to achieve a good deal with the EU over its future trading relationship.

But in a question and answer session following her speech, Stephen Schwarzman, chief executive of private equity firm Blackstone Group , asked May to confront the downside risks to Britain’s EU exit.

“I guess we are believers,” said Schwarzman whose firm was part of a joint venture that agreed to buy up the commercial property portfolio of Britain’s rail network owner for $1.9 billion.

“But on the other side, things could really go off with a bad Brexit and ultimately a change of government. What we really worry about is how bad things can get?”

In response, May said: “I absolutely appreciate and understand from that – you’re making decisions and looking ahead to what the future holds. And at the moment there is that uncertainty about what the future will hold in terms of Brexit.”

She pledged Britain would make a success of Brexit whatever the outcome of negotiations.

Earlier, IBM boss Ginni Rometty asked May on stage how she suggested businesses should manage the risks of Brexit.

“If you were us … what would you do in our shoes to be planning right now. What would you do now to balance that risk?”

PRO-BUSINESS

May’s Brexit proposals were savaged by EU leaders at a summit last week and many in her own party have criticized her approach, raising prospects that she will fail to strike any agreement and that Britain could leave without a deal, something business leaders fear would be hugely damaging.

“We’re at the point of the negotiations where we’ve got a few weeks to go,” May said. “We don’t know where the negotiations will end. I’m confident about getting a deal but we have to make sure we’re prepared for any eventuality.”

In her speech, May said she would not abandon her current Brexit plan, shrugging off criticism at home and in Brussels.

She said her proposal to keep a close trading relationship with the EU on goods, protect manufacturing jobs and resolve arguments over the borders of Northern Ireland, while ending unrestricted immigration from the EU, was the only way forward.

However, with many of her own lawmakers and the opposition Labour Party saying they will vote against such a deal in parliament, there are major doubts over the final outcome of negotiations and May’s long term future as leader.

In her speech, May promised that businesses investing in Britain would get the lowest rate of corporation tax among the G20 group of leading economies, with access to service industries and a financial center in London “that are the envy of the world”.

She pledged to deliver an economy that is “knowledge-rich, highly innovative, highly skilled and high quality but with low tax and smart regulation” and said a new immigration system would allow businesses to attract the brightest and best.

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