A cabinet minister has admitted that Brexit has harmed investment in the UK by creating new barriers to doing business.
Mel Stride’s comments come as a string of top business leaders have ditched the Tories for Labour, citing the government’s weak economic record and internal turmoil.
Speaking on Tuesday Mr Stride, the work and pensions secretary, said he accepted that new “frictions” between the UK and the EU “will have an impact”.
Asked if Brexit had hit business investment, Mr Stride told the BBC: “I think if you have a situation where you create frictions between yourself and your major trading partners, I think you have to accept that that will have an impact.”
His comments come after Paul Drechsler, former CBI president and ex-government skills tsar, told The Independent that Tory turmoil was damaging investment and Labour was now winning the argument among businesses.
Mr Drechsler, a former adviser to the former prime minister David Cameron, also blamed Brexit and the Tory chaos afterwards for reducing the willingness of firms to invest in Britain.
He slammed the government’s lawbreaking during Brexit talks, as well as the government’s plan to purge the statute books of British laws that originated in Brussels.
“If there’s one thing you could depend on in the UK for centuries it was adherence to the rule of law but over the past small number of years we’ve prorogued parliament, we’ve rejected international treaties we’ve just signed,” Mr Drechsler told BBC Radio’s World at One on Tuesday.
“We’ve talked about our judges as enemies of the people and now we’re about to bin thousands of EU laws without having any alternative for business to rely on. It’s self-evident that the trend lying up to 2016 has shifted significantly over the past six years.”
It comes after Mr Drechsler wrote in The Independent that businesses were being “wooed” by Labour. “I am hearing that CEOs of big high street firms are starting to talk with warmth – and even optimism – towards Labour. This is a seismic change,” he said.
On Monday, Iain Anderson, founder of public relations giant Cicero, revealed he was switching to Labour after backing the Tories for 40 years, citing Boris Johnson’s alleged “f*** business” comments.
He also said discussions with Tory insiders had led him to believe that prime minister Rishi Sunak would ramp up the culture wars ahead of the next election in the absence of anything positive on the economy.
Britain’s economy is struggling with high inflation, while the International Monetary Fund has forecast that it will be the only G7 nation, including Russia, to see its GDP shrink this year.
Earlier this week a leading Bank of England warned that Brexit had caused a decline in business investment which is costing the average UK household around £1,000.
Mr Stride, who voted Remain in the EU referendum in 2016, said: “What I think we need to do now and I know the government is absolutely determined on this … is to maximise the benefits of the freedoms we now have given that we are not part of the European Union.”
“I think it is taking a bit of time to move from the disbenefits of what I just described at the beginning to the benefits of what I have referred to just there which is seizing those opportunities.”
