June 24, 2018 / 11:49 AM / 5 months ago

UPDATE 3-UK ministers take aim at business over Brexit warnings

* Minister says threats are undermining prime minister

* Companies told warnings could backfire

* Business leaders say need clarity of post-Brexit terms (Recasts, adds comment from CBI group)

By Andrew MacAskill

LONDON, June 24 (Reuters) - The British government and business leaders clashed in a deepening row over Brexit on Sunday after a senior minister accused companies of issuing "completely inappropriate" threats and undermining the prime minister.

Aircraft manufacturer Airbus last week issued its strongest warning over the impact of Britain's departure from the European Union, saying a withdrawal without a deal would force it to reconsider its long-term position and put thousands of British jobs at risk.

Other European companies with major operations in Britain have also started to speak out two years on from the Brexit vote, voicing concerns over a lack of clarity on the terms of trade when Britain leaves next March.

"It was completely inappropriate for businesses to be making these kinds of threats for one very simple reason - we are in an absolutely critical moment in the Brexit discussions and what that means is that we need to get behind (Prime Minister) Theresa May," the health minister Jeremy Hunt told the BBC.

"The more that we undermine Theresa May the more likely we to end up with a fudge which will be absolute disaster for everyone," he added.

German carmaker BMW has warned the company would have to make contingency plans within months if the government did not soon clarify its post-Brexit position and German industrial group Siemens said it urgently needs clarity on how its operations would have to be organised.

The leaders of five major business lobby groups also warned the prime minister over the weekend that the ongoing uncertainty about Brexit could cost the economy billions of pounds.

Hunt, a senior figure in the government who is viewed as a potential future prime minister, dismissed "siren voices" who say Brexit negotiations are not going well and said people should ignore them.

However, Paul Drechsler, the president of leading business lobby group the CBI, said Hunt's criticisms were the "perfect strategy" for discouraging investment and would make it harder to increase tax revenue to spend on matters such as healthcare.

"The perfect strategy for inhibiting businesses from investing in the UK," Drechsler said. "This country needs ministers to be enthusiastic champions of business as found in most other countries."

THE PARTY OF BUSINESS?

The ruling Conservatives have traditionally considered themselves the party of business, advocating free markets, lower taxes and political stability.

But as Britain's politics become more polarised because of Brexit, many business leaders are feeling alienated by a party that is pushing through policies on trade and immigration that they say will damage their companies.

With only nine months until Britain is due to leave the EU on March 29, little is clear about how trade will flow as May, who is grappling with a divided party, is still trying to strike a deal with the bloc.

Business leaders are increasingly concerned that their concerns are being ignored and are stepping up their contingency plans in case Britain crashes out of the EU without a deal.

The health minister's comments were later echoed by the international trade minister, Liam Fox, who said Britain's negotiating position was being undermined by companies urging the government to rule out leaving without a deal.

"People who are making these comments need to understand that they may be actually putting the UK at a disadvantage by making these cases," he told Sky News.

The foreign minister Boris Johnson was quoted in the Telegraph newspaper by two sources over the weekend as dismissing business leaders' concerns about the impact of Brexit, using foul language in a meeting with EU diplomats.

A spokesperson for the foreign office disputed whether Johnson had used bad language and said he had been attacking business lobbyists.

Brexit remains the defining issue in British politics two years after Britons voted by 52-48 percent to leave the bloc.

Around 100,000 supporters of the EU marched through central London on Saturday to demand that the government hold a final public vote on the terms of Brexit, organisers said. (Reporting By Andrew MacAskill Editing by Toby Chopra/Keith Weir)

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