Businesses are not at all prepared for a No-Deal Brexit warns the Institute of Directors (IoD) as it pleads with them to start No-Deal contingency planning immediately. Anna Tobin reports
The IoD’s latest survey shows that the Brexit delay until Halloween has not been used productively by most firms. The IoD says that the extension has had little impact on businesses’ Brexit planning, and it is pleading with business leaders to use the time left to assess what the impact of No-Deal could have on their organisations and to prepare accordingly.
IoD figures show that the proportion of its members who had activated contingency plans increased slightly between January and April, from 18 to 23%, but that more than half of firms surveyed had still not engaged in any contingency planning, and only 4% said that they would be using the extension period to make Brexit preparations.
The IoD also blamed the Government for providing only very limited financial support for small businesses to prepare for Brexit, and ignoring its repeated calls for Brexit planning vouchers to be distributed to help SMEs get the professional help they need for complex trade and legal issues.
“This week’s vote won’t be the last twist in the Brexit saga, but it made clear how real the possibility of no deal is,” said Edwin Morgan, interim director general of the IoD, referring to the Conservative leadership elections. “Business can have no absolute reassurance that an agreement will be reached, particularly given the commitment of some Conservative leadership candidates to leaving the EU in October with or without a deal. It feels like the extension is at risk of being wasted.
“It shouldn’t need saying, but many seem to have forgotten that getting a deal would be by some distance the better outcome, both for the UK and the EU. No deal is not ‘clean’, the mitigations announced so far are temporary, incomplete and untested with industry, and we would then have to enter into talks with the EU all over again. Far from providing clarity, a WTO exit simply extends uncertainty about the future, so it is no surprise a clear majority of IoD members say no deal would harm their business.
“If businesses can’t have faith in politicians, that means they have to look out for themselves. With business costs rising in many quarters, and management time precious, it’s understandable that firms don’t want to put resources towards preparing for something we still hope won’t happen. But the risk of no deal is very real, and so we’d urge all businesses, if they haven’t done so already, to carefully consider their exposure and draw up mitigation plans now.”