Finance and leasing industry warned of ‘long and tortuous’ years ahead as Brexit deadline nears

Lord Darling, now a member of the House of Lords, told the industry: “We as a nation have bought a ticket to a very uncertain destination and we need to understand the differing points of view on both sides of the channel.

“The people who voted to leave were not voting to leave at any price and I don’t think we can settle for leaving at any price. The government has pitched a ‘hard Brexit’ but this is not a divorce. You have one on one side and 27 others, all of whom will have a say in the discussion.

“I have never heard of a negotiation where you get everything you want. Whatever we get will not be as good as what we have at the moment.

“There is a substantial chance there will be a car crash in two years time. Don’t underestimate the difficulties you will face. It will be a long and tortuous process.”

His sobering comments come as the deadline nears for the UK to trigger Article 50, the start of the formal process for leaving the EU. Prime Minister Theresa May has targeted a March deadline and has already secured the support of MPs for a bill allowing the process to start.

She insists her timetable is on track, despite the House of Lords voting to amend the Article 50 bill to demand a guarantee for EU citizens living in the UK to be made within three months of the process starting. The bill has to return to the House of Commons for a vote on the amendment.

Lord Darling, who was speaking before the House of Lords vote, said lawmakers have to respect the will of the majority of British people who voted to leave the EU in last year’s referendum.

“Article 50 has to be engaged following the referendum. You have to respect the result of the democratic process,” he said.

However, he insisted that parliament must have a final say on the proposed deal that the UK agrees with the EU after Article 50 is triggered to start a tough negotiating process that could take years.

He added: “You can’t exclude parliament from having a vote on the agreement the government reaches as part of that process. It would be democratically wrong to exclude parliament.”

He called for a ‘pragmatic and common sense approach’ on both sides of the negotiating table and discouraged assumptions that other global economies might make up for any drop in trade with the EU when the new deal is signed.

“Trade with the United States is essential, but it’s not an alternative,” he said, “We can’t ignore Europe. Bear in mind that trade halves as distance doubles.”

Despite his concerns, he recognised the strength of the UK economy as the 5th biggest in the world and the unique asset of the London financial markets.

Lord Darling added: “It is in both our interests that we strike a good deal. The next few years will be absolutely critical and we need to get it right.”

During the event, FLA chairman Nigel Clibbens urged the industry to continue to make its voice heard.

As he reviewed a robust performance by the industry last year, with £118 billion of new finance provided, up from £110 billion in 2015, he said: “That momentum continues in 2017.  There will be opportunities aplenty, and the challenges, though inevitable, are not insurmountable. Be ready for the opportunities and prepared for the challenges. With the FLA in our corner, I think we’re well placed to do both.

“The FLA will be out there promoting our sectors to politicians and policy makers and I would urge each of you to continue to contribute to that effort. We now represent upwards of 90% of both the asset and motor finance markets, and in the consumer finance market, our members provide over a third of new business written in the UK. 

“We have a big voice, and the more of us there are, the greater our influence.”