With just five months to go before the UK leaves the European Union (EU), the British Chambers of Commerce (BCC) is calling for UK ministers to redouble their efforts to reach an agreement with the EU and ensure a transition period that could help firms prepare for change and prevent a slump in both investment and recruitment. The leading business group presses the need for clarity and precision so that firms can plan for the future with a degree of confidence.
In partnership with independent business funder Bibby Financial Services, the BCC has conducted one of the biggest surveys of business opinion since the EU Referendum, amassing the views of over 2,500 firms from across the UK. A fifth of those businesses surveyed (21%) will cut investment if there’s ‘no deal’, 20% will move part or all of their business to the EU and 18% will cut back on recruitment, but in the event of a status quo transition these numbers fall dramatically. Some 62% of firms still haven’t completed a Brexit risk assessment.
Larger firms and those who are internationally active are the most exposed to the ramifications of a ‘no deal Brexit’. 28% of firms with over 50 employees and 24% of those who export or import internationally say they would cut investment plans.
The fact that one-in-five businesses (20%) say in a ‘no deal’ scenario they would move part or all of their business to the EU27 is an important wake-up call, both on the need to agree an orderly exit from the EU and on the need for the UK Government to enhance incentives for investment.
Dr Adam Marshall, director general of the BCC, explained: “Businesses are clear that reaching a deal with the EU which addresses the future terms of trade and provides certainty must be the Government’s foremost priority. Our evidence is clear… Any failure to reach a political agreement would have real-world consequences, with significant decreases in both investment and recruitment. Larger firms and those active in international trade would suffer the most from a disorderly and sudden exit from the EU, but there will be impacts right across the board.”