UK firms will plan for a 'Hard Brexit' scenario if lack of clarity extends beyond January, says BT boss

The boss of BT warned that British businesses would be start planning for a "Hard Brexit", unless the terms of a transitional Brexit deal were made clear by early 2018.

Speaking at the Confederation of British Industry's annual conference in London on Monday (6 November), Gavin Patterson said Britain had to "get on with Brexit" and get some clarity around it.

"There's too much uncertainty around it and we need to have clarity around the transitional process, or we're going to have to make plans for a Hard Brexit, which will not be good for anyone," he told the audience.

"If we don't have clarity around Brexit by early next year we'll be planning for the worst case scenario and it will purely be a practical choice, not a political choice."

Speaking at the same event earlier in the day, Prime Minister Theresa May hinted that she would be in favour of a transition agreement with the European Union in the run-up to Brexit.

The PM said the government wanted to forge a new ambitious relationship with the EU, but with a new balance of rights and responsibilities.

"I have made clear that a strictly time-limited implementation period will be crucial to our future success," she added.

However, Patterson's comments echoed the thoughts of Labour leader Jeremy Corbyn and CBI President Paul Drechsler, who both warned "the clock was ticking" on Brexit.

"To delay a transition deal until a final deal is agreed, as the prime minister says she wants to do, is simply not good enough," said Corbyn.

"The prospect of sudden changes in the legal and regulatory environment in which people do business is affecting your decisions right now."

Drechsler added that majority of UK firms will begin moving staff and delay investment by March next year if no Brexit transition deal in place. He pointed to a poll of 306 companies, by the CBI, which revealed that a quarter will trigger contingency plans by January if there is no transition deal in place, while a further quarter said they would wait until March.

Patterson also warned the impasse surrounding the Brexit negotiations could be detrimental to the level of skills accessible to UK businesses.

"The talent agenda is critical to Brexit and is an issue that is not getting an awful lot of airtime," he said.

"Whether it's engineers in a lab or whether it's people laying down cables, we need highly skilled people."

BT's chief executive, however, added Brexit had not had an impact on research and development, which he said was absolutely pivotal so solve Britain's ongoing productivity problem.

"Productivity is an issue, regardless of Brexit," he said.

"It has been flatlining for years. We need reassurances from the government to ensure we can see a return on our investments on building infrastructure and on developing a skilled workforce."