Ikea boss says Brexit has unleashed ‘chaos’

A leading Ikea executive on Thursday said Brexit had caused “chaos”, as a senior UK minister admitted in Davos that Britain’s departure from the EU had brought “significant challenges”.

Jesper Brodin, chief executive of main Ikea retailer Ingka, said at the World Economic Forum in Switzerland that Brexit had made it harder to operate his business across borders.

“We ended up in a situation that is much more chaotic,” he told the Financial Times on the sidelines of the event. “Obviously the UK leaving the EU has added bureaucracy, administration and cost to the system. Am I happy about that? Of course not.”

Brodin added any attempts to improve trade between the UK and the EU would be beneficial.

Meanwhile business secretary Grant Shapps, who voted Remain in the 2016 Brexit referendum, said in a speech in Davos: “I won’t deny that Brexit has brought significant challenges.

“But here’s the thing . . . I was a minister both before and after Brexit. And now we’ve gone through the process of leaving the EU, I can see how we reap the benefits.”

Shapps said the UK would now enjoy regulatory freedoms with a more “agile, forward-looking approach”, as well as new trade deals.

UK business secretary Grant Shapps said a failure to nurture fast-growing businesses was the most pressing challenge confronting the UK © Sikarin Fon Thanachaiary/World Economic Forum

The business secretary was the most senior British minister to attend the World Economic Forum, where Labour leader Keir Starmer wooed world leaders and chief executives with a pro-business message.

Shapps said a failure to nurture fast-growing businesses was the most pressing challenge confronting the UK.

“We’ve got to do better in converting start-ups into scale-ups,” he added, referring to the need to turbocharge more small and medium-sized enterprises through additional funding.

Shapps bemoaned the lack of homegrown technology giants and promised to ape Silicon Valley, saying he would organise a “scale-up summit” later this year to bring tech and finance expertise together.

But the business secretary voiced concern that the US government’s multibillion-dollar green stimulus programme was “dangerous” because it could lead to a “slide towards protectionism” around the world.

US president Joe Biden’s Inflation Reduction Act is providing big subsidies and tax credits to green investors. “We are great global traders and we want the world to be as open as possible,” Shapps said. “We have to be careful we don’t slip into protectionism.”

The UK has made limited progress with trade deals since Brexit, striking only four new agreements, and “rolling over” 71 it already had through EU membership.

William Hague, former Conservative leader who also backed Remain in the 2016 referendum, blamed this week’s collapse of UK battery maker Britishvolt on Brexit.

The Northumberland-based start-up was trying to help the UK become a battery manufacturing powerhouse, notably for electric cars, but it went into administration after failing to secure emergency funding from investors.

“It’s a sad reflection probably on Brexit . . . If you are going to succeed with batteries, you need big manufacturers to be in the same market using those batteries. So, that’s part of the damage that has been done by leaving the EU.”

Some delegates at Davos said Brexit continued to cast a long shadow over the UK.

Labour leader Keir Starmer speaks at an event in Davos
UK Labour leader Keir Starmer, pictured speaking in Davos, said prime minister Rishi Sunak should have attended the World Economic Forum © Markus Schreiber/AP

The head of a sovereign wealth fund, who declined to be identified, said the recent political history of the UK including Brexit was “an unmitigated disaster”, and the country had made a “catalogue of policy mistakes” that would take years to unwind, if ever.

With Labour enjoying a lead of about 20 percentage points over the Conservatives in opinion polls, Starmer said prime minister Rishi Sunak should have attended the World Economic Forum.

Starmer, who was in Davos with shadow chancellor Rachel Reeves, said the “absence of the UK” had been pressed on him during his meetings.

Reeves admitted the disastrous “mini” Budget in September overseen by the then prime minister Liz Truss had made it harder to make the case for borrowing to invest in growth, which is a key plank of Labour’s strategy.

But she insisted investors could tell the difference between the unfunded tax cuts proposed by Truss and borrowing to invest in growth.

Reeves said she and Starmer were in Davos to show that the UK economy would be open for business under a Labour government, which would renegotiate elements of the Brexit deal finalised in 2019 by the then prime minister Boris Johnson.

Starmer called for a “clean power alliance” of countries with ambitions to cut their carbon emissions and share net zero best practice.

One Conservative peer at Davos said Labour had “completely outplayed” his own party in Switzerland.

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