US Business Executives Ask UK Prime Minister May: How Bad Can Brexit Get?

British Prime Minister Theresa May speaks at the U.N. headquarters in New York on Sept. 25, 2018. (Peter Foley/EPA-EFE/Pool via Reuters)

NEW YORK—British Prime Minister Theresa May was reminded of how worried businesses are about Brexit on Sept. 26 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 will 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 in March 2019.

She said she’s confident that Britain will 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 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, Ginni Rometty, the chief executive of IBM, asked May 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. That has raised concern 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 wouldn’t 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, is 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.

By William James