Most firms in the UK will implement their strategies and plans to cope with a troubled Brexit by December if there is no clarity by then on how Britain will leave the European Union (EU), according to a latest survey.
UK’s business organisation, the Confederation of British Industry (CBI) said its survey showed how the lack of a breakthrough in negotiations between the UK and Brussels was endangering British jobs, trade, business, investment, and economic growth.
Eight out of ten firms say Brexit has had a negative effect on investment decisions, according to new CBI research on business preparations.
A survey of 236 firms, representing 101 large companies and 135 SMEs, also revealed the majority will implement damaging contingency plans in the absence of greater certainty on Brexit by December 2018.
Carolyn Fairbairn, CBI Director-General, warns ‘the speed of negotiations is being outpaced by the reality firms are facing on the ground’. And almost one in five firms say the point of no return for triggering their plans has already passed.
Contingency plans include cutting jobs, adjusting supply chains outside the UK, stockpiling goods and relocating production and services overseas.
Businesses’ reluctance to invest will have a knock-on effect for jobs, wages and living standards. Investment is a pillar of productivity, where the UK already trails its international peers.
Many firms are now planning for a ‘no deal’ scenario, the survey adds, with severe implications for people’s livelihoods on both sides of the Channel.
Carolyn Fairbairn, CBI Director-General, said, “the situation is now urgent. The speed of negotiations is being outpaced by the reality firms are facing on the ground.
“Unless a Withdrawal Agreement is locked down by December, firms will press the button on their contingency plans. Jobs will be lost and supply chains moved. The knock-on effect for the UK economy would be significant. Living standards would be affected and less money would be available for vital public services including schools, hospitals and housing.
“Uncertainty is draining investment from the UK, with Brexit having a negative impact on 8 in 10 businesses. From a multinational plastics manufacturer which has cancelled a £7 million investment, to a fashion house shelving £50m plans for a new UK factory, these are grave losses to our economy.
“Many firms won’t publicise these decisions, yet their impact will show in lower GDP years down the line. As long as ‘no deal’ remains a possibility, the effect is corrosive for the UK economy, jobs and communities.
“Businesses have displayed remarkable resilience since the Referendum, but patience is now threadbare. Negotiators must secure the Withdrawal Agreement before December to unlock a transition period. The message to politicians on all sides is: ‘your actions will echo through generations’, Fairbairn concluded.
