Investment and recruitment would fall with ‘no deal’ Brexit, says survey

Chris Fletcher

Manchester bosses are concerned about the prospect of a ‘no deal’ Brexit following a major survey by business support group the British Chambers of Commerce.

In partnership with Liverpool-based independent business funder, Bibby Financial Services, it has conducted one of the biggest surveys of business opinion since the referendum, amassing the views of more than 2,500 firms from across the UK.

It found that, with just six months to go before the UK leaves the EU, nearly two-thirds of firms still aren’t preparing for Brexit – and in the event of a ‘no deal’ outcome many would cut investment and recruitment plans.

The 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.

And it is pressing the need for clarity and precision so that firms can plan for the future with a degree of confidence.

A fifth of businesses surveyed (21%) will cut investment if there is ‘no deal’, 20% will move part or all of their business to the EU, and 18% will cut recruitment – but in the event of a status quo transition these numbers fall dramatically.

The survey also found that 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 ‘no deal’.

The survey revealed that 28% of firms with more than 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 EU 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.

Chris Fletcher, campaign & marketing director at Greater Manchester Chamber, said: “This survey confirms what many businesses are telling us on a day-to-day basis that the number one priority for government must be to reach a deal with the EU and lift the cloud of uncertainty.

“A no-deal scenario could have huge impact on business and that will only intensify the nearer this happens to the 29th March next year.

“Some certainty is better than the limbo-like situation more and more businesses are finding themselves in where the only thing they can plan for is the worst-case scenario that everything stops and changes in March next year.

“Businesses don’t need false promises, but over two years on after the vote I’m not sure anyone thought we’d be in this position.”

The survey also highlights a concerning lack of Brexit preparation.

According to the findings, 62% of UK firms have not done a risk assessment of the impact of Brexit to their business.

The figures reflect a huge disparity between the preparations of the largest companies and their smaller counterparts – 69% of micro firms (those with 1-9 employees) have not completed an assessment, compared with 24% of firms with over 250 employees.

The BCC has found that many SMEs are either awaiting more clarity before they act, or are suffering from ‘Brexit fatigue’ and have switched off from the process because they don’t believe they will be affected.

Greater Manchester Chamber’s trade experts are starting a series of Brexit clinics and boosting other trade services in readiness to help and assist business.

Chris Fletcher said: “The survey figures are worrying and possibly symptomatic of the ‘bored of Brexit’ feeling that many people are feeling.

“This is dangerous, though, as we enter the final six months ahead of March 2019. We are increasing our calls to business not to ignore what is happening.

“These are uncertain times and to take that first step to being prepared isn’t a panic measure, it isn’t playing into anyone’s hands on either side of the debate on Brexit – it’s a sensible and practical way of doing what’s right for your business.”

He added: “We are expanding the help and assistance available to members both for now and in the future, whether you are trading in or outside of the EU.”

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