New figures released today show that a majority of business leaders (51%) want to keep in step with the rules of the Single Market for goods and services after the UK leaves the EU, in order to preserve maximum access. By contrast, 21% of members prioritise changes to domestic regulations, even if it reduces access. The Institute of Directors, which received responses from over 900 members in an October survey, said this was a clear steer to the Government to prioritise a final deal with the EU that minimises regulatory barriers to trade.
Uncertainty over the shape of the UK’s future relationship with the EU means that just under half (46%) of IoD members currently feel unable to plan for Brexit. This figure varies by sector, with directors in manufacturing less likely to say they can plan now (44%), compared to directors in finance (57%). In total, 61% of firms anticipated they would be preparing for different Brexit scenarios, although fewer than one in ten (8%) said they had triggered contingency plans, such as moving operations. Overall, around one in five (22%) thought they might have to move some operations to the EU.
Putting long-term planning to one side, the most pressing concern for businesses is guaranteeing the rights of EU citizens living in the UK, and UK citizens in the EU. This is one of the issues being negotiated in the first phase of the Brexit talks, and the IoD is calling for a swift resolution to provide reassurance for companies and their staff. Other pressing priorities for SMEs include avoiding tariffs and securing urgent agreement on transition.
These results will be presented at the Treasury Committee evidence session on the UK’s economic relationship with the EU today at 10am by Allie Renison. The full survey and analysis can be found in The business end of Brexit briefing document.
Allie Renison, Head of EU and Trade Policy at the Institute of Directors, said:
“British companies have huge potential to grow their exports and seize opportunities in new markets across the world, but a smooth Brexit is essential to paving the way towards this goal.
“IoD members are clear that they want the UK to cooperate closely with the EU after Brexit to make sure they have the most access they can get to the Single Market. We will be outside of the EU, and not bound by its laws, but to make sure goods and services can flow as freely as possible, businesses think we should keep our regulations closely aligned in these areas. The Government will have to decide what the UK’s post-Brexit trade strategy is, and which trade deals we will pursue across the world, but companies are calling for the Government to balance this new freedom with the need to hold on to our biggest market.
“Just as important as the final deal are the stages we go through to get there. Businesses urgently want the UK and the EU to announce they’ve reached an agreement on citizens’ rights, which has been close but just out of reach during the previous rounds of talks. A quick agreement on a transition deal is also a high priority, preventing companies from having to take premature decisions on relocating operations.”