Major Tory donors are warning that a no-deal Brexit risks precipitating a recession, with some reconsidering their support should the party allow Britain to crash out with no agreement.
With Theresa May desperately battling for concessions from Brussels and less than 50 days until Britain’s EU departure, senior government sources admitted on Saturday that attempts to delay Brexit would become “irresistible” should no deal be agreed by the end of this month.
There is now serious nervousness among moderate party backers, with one donor warning of a “wider insurrection if Britain spirals out of the EU with no deal”.
Maurizio Bragagni, the chief executive of cable company Tratos, which has given more than £200,000 to the Tories, and Rami Ranger, whose Sun Mark distribution company has given more than £1m, both called on the party’s MPs to compromise, adding that a recession was possible in the wake of a no-deal Brexit.
The warnings come as MPs threaten to trigger a plan next week that would force the prime minister to ask for a delay to Brexit, should a deal not be in place in time. In an attempt to head it off, Downing St sources confirmed that MPs will have yet another chance to alter May’s Brexit plans before the end of the month. Senior figures now concede that MPs will find a way to stop a no-deal departure if no agreement is in place by then.
There are now serious concerns among Tory moderates that the party’s handling of Brexit will hit its reputation. One veteran backer suggested the party would become more reliant on hardline Brexiters for funding. “Inevitably the Brexit/Remain split in the party has, I believe, resulted in some previous donors now not willing to continue,” he told the Observer. “A number of new, younger donors mainly in the City who are Brexiteers have come forward.”
In a letter sent to all MPs last week, Bragagni said that his business would not be affected by a no-deal outcome. However, he warns that “no deal would see the British people pay too high a price and the country along with them”.
“Parliament, political parties and the cabinet are at odds. I don’t want to imagine the potential for wider insurrection if Britain spirals out of the EU with no deal. Her Majesty the Queen made a veiled appeal for a middle ground to be found in order to unite the country. That, to me, sums up the referendum result.
“No business can plan ahead when there is so much uncertainty surrounding a nation. Some, like my own, were already built to survive Brexit without a deal, but we are big enough to recognise that plunging the country into chaos and even a recession is too big a price.”
Ranger told the Observer that Brexit was “a mess created by politicians for no good reason” and a “self-inflicted wound”. He said: “It was a narrow victory for the Leavers, but the Leavers are showing no consideration to those 48% who voted to remain … Sadly, the ego of some politicians is bigger than their vision. They are behaving as if we still have an empire to dictate our terms. They do not appreciate that, in order to gain something, we also have to give something in return.
“Brexit without a deal will plunge the country into chaos and even a recession. Sadly, some politicians refuse to listen to the voices of concern coming from the CBI , Bank of England and the Chancellor of the Exchequer. I hope good sense will prevail.”
Both donors are strong supporters of May and her proposed Brexit deal. Other more fiercely pro-Remain figures, such as banker Sir Simon Robertson and industrialist Sir Andrew Cook, have not given to the party for well over a year. More are understood to have reduced their gifts or are considering what more to do in the future. It comes as many MPs believe a snap election this year is a real possibility.
Another six-figure donor said: “If no deal should happen by accident, I think it would be bad news. The Conservative party would have to own what follows.
“I am worried. We need to understand a new generation that has come into the workplace and is thinking aspirationally, about where they want to be. The party that can give hope to this generation is the party that is going to win. In my view, it requires clear policy decisions, particularly on housing, infrastructure that is new, innovative and hopeful. If we crash out, it will be another two years in which the domestic agenda won’t feature.”
Moderate Tory ministers are also beginning to voice concerns about the influence of the European Research Group (ERG), a body of hardline pro-Brexit MPs who have refused to back May’s deal without changes that appear to be impossible to secure. Defence minister Tobias Ellwood said the group was a “party within the party”.
He told the BBC: “I’m not sure what the ERG are fighting for. They seem to want in parallel to the Brexit debate also a battle for the soul of the Conservative party. They’re acting as a party within the party.”
