Trade war over Brexit will cost us business in EU, say UK firms

BRITISH businesses are leaning on the Government to avoid a trade war with Brussels over Northern Ireland, amid fears they could be frozen out of lucrative public sector contracts with the European Union.

European sources said that Vodafone and others had expressed concerns about the potential fall-out if Liz Truss fails to secure a negotiated settlement with the EU.

Some of the nation’s biggest companies are lobbying the Government about the risk of harming their interests in Europe if the post-brexit trade negotiations turn sour.

Smooth trade with the EU is vitally important for businesses within the FTSE 100, London’s leading stock market index, where companies generate 80pc of turnover from outside of the UK.

Vodafone is based in London, but its biggest market lies in Germany, where it made €14bn (£12bn) of its €46bn group revenues for 2022.

Nick Read, chief executive, has previously pointed to the EU’S €750bn postpandemic recovery fund as a growth opportunity for the business, as 70pc of the grants are being distributed in member states where Vodafone operates.

A Vodafone spokesman said: “While we are less directly affected by EU-UK trade relations than other industries, we run large operations both in the UK and in the EU and also report our results in euros.

“Hence, it is important to avoid barriers or frictions, not least in the current political and economic environment.”

James Cleverly, Foreign Secretary, met Maroš Šefčovič, his EU counterpart, on Friday to try to break the deadlock over the Northern Ireland Protocol that has existed since February.

Ms Truss scrapped parts of the postbrexit deal while she was foreign secretary in an attempt to make goods flow more smoothly between Britain and Northern Ireland. The DUP welcomed Ms Truss’s intervention.

But the EU said that breached international law.