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A man with a plan
Claims that UK businesses will be prepared for a no-deal Brexit have been challenged by the IoD, after member survey data suggested that one in two firms “cannot be fully prepared”. The survey results are covered by the Times
The survey, which was completed by 952 business leaders last month, shows just 15% believed they were “fully prepared” for a no-deal Brexit. 53% said they had done “as much preparation as we can, but cannot be fully prepared”.
Edwin Morgan, Interim Director General of the IoD, said “We can definitely be more prepared than we are and [companies] absolutely should be doing that. But I wouldn’t want to overstate how much we can be prepared”.
Edwin also explained that government-issued guidance released thus far has been deemed “not very helpful” or “not helpful at all” by 42% of company directors. The technical notices, for example, are “too technical, too jargonistic” for businesses to follow.
In Boris Johnson’s first speech as Prime Minister he suggested “businesses will be ready” for EU exit on October 31. A spokesperson for the government said it has allocated £108 million of funding to ensure businesses’ Brexit preparedness.
Honey, I shrunk the economy!
In case you missed it, GDP growth figures were released
at the end of last week, which showed the UK economy shrank first time in nearly seven years in Q2, by 0.2%.
Chancellor Sajid Javid has attributed the performance to a “challenging period across the global economy, with growth slowing in many countries”. The sterling plunged to two-and-a-half-year lows at the news.
The Office for National Statistics commented “Manufacturing output fell back after a strong start to the year, with production brought forward ahead of the UK’s original departure date from the EU”.
Tej Parikh, Chief Economist at the IoD, remarked
the figures are a “rude awakening” to the realities facing UK businesses, including having to run down stockpiles that were built up before the original Brexit date in March.
He observed “the economy is facing a bumpy ride going into Q3”. He added the government should give firms “a significant shot in the arm to return investment and productivity growth”.
The IoD’s comments
received substantial press coverage, including CNN, the Financial Times
, the Independent
, the Telegraph
and the Times
More money, more problems
UK business groups including the IoD have warned
the Home Secretary against raising the salary threshold for immigrant workers to £36,700 after Brexit, arguing it would prove detrimental to British businesses.
It comes as Priti Patel is reportedly being urged by some in the Conservative Party to raise the threshold from the current proposed minimum of £30,000 for all new foreign workers in an effort to protect lower-skilled, UK-born staff.
Edwin Morgan, Interim Director General of the IoD, commented “The threshold is repeatedly raised by employers as a concern, and raising the bar even higher would put another spanner in the works for firms looking to grow.”
A new report from the Centre for Social Justice, co-founded by Tory grandee Iain Duncan Smith, is calling for an increase in the income threshold for foreign workers. It argues that a significant rise in low-skilled migration to Britain has suppressed UK low-income wages.
Income thresholds at present only apply to non-EU foreign workers, but are expected to extend to those coming from the EU after Brexit.
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