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Press Releases Policy publications - Brexit

Companies still in the dark on 'no deal' planning

03 Aug 2018

uk and eu flagThe Institute of Directors is today calling on the Government to speed up publication of its ‘no deal’ guidance, as a survey of 800 business leaders reveals that less than a third have conducted any Brexit contingency planning.

Half of businesses say they do not intend to draw up plans, with smaller firms more likely to be in this category. Nearly 1 in 2 of these firms say this is because they will only be making adjustments once the future relationship becomes clearer.

A fifth of companies anticipate drawing up plans, but three quarters of these also say they are waiting for more clarity about the future UK-EU relationship first – either on the withdrawal agreement or a new deal with the EU.

At present, only one in ten companies are seriously considering relocation to the EU. But this could rise to over one in five should the negotiations not go well.

Stephen Martin, Director General of the Institute of Directors, said:

"Many companies are still unprepared for Brexit, and it’s hard to blame them. When it comes to knowing what to plan for and when, firms have been left in the dark. Trade associations like the IoD are doing their best to fill the information void, but the reality is that many companies feel they can only make changes once there is tangible information about what they are adjusting to.

"As long as no-deal remains a possibility, it is essential that the Government steps up to the plate and provides advice on preparing for such an outcome. We therefore urge them to speed up publication of the technical notices. This should also help make companies more alert to the need to prepare now for all eventualities.

"Any transition period must take account of the fact that many businesses feel they can only adjust once there is clarity about the direction of travel. Given full negotiations on the future relationship can only begin once we have left the EU, both sides should ensure there is a proper implementation period once a new agreement has been concluded. This is after all what would happen following the conclusion of any other trade deal.”

More detail on firms’ contingency planning:

  • Internationally active firms, trading with both the EU and non-EU countries, are somewhat further ahead on contingency planning than the average, with 41% reporting they have already actively engaged in this area.
  • While manufacturing firms are much less likely than financial services to say they do not intend to draw up any plans (31% vs 59%), they are behind financial services on implementation (2% to 8%). ICT is sector furthest advanced, as 10% have already triggered their contingency plans.
  • IoD members with a local branch or subsidiary in the EU have a particularly large share engaged in some form of planning (53%), higher even than EU goods or services exporters (44% and 43% respectively). They are also more likely to be looking at shifting operations from the UK to the EU - 10% have already done so, a further 10% are actively considering it, and another 10% say they will depend on how negotiations go.


Full survey results: 790 respondents, conducted between 9-24 May 2018

Have you drawn up and/or implemented any contingency plans for Brexit yet?

Total

Trade with EU and non-EU

Export goods to EU

Export services to the EU

Subsidiary in EU

We do not anticipate drawing up nor implementing any contingency plans for Brexit

49%

37%

28%

35%

25%

We have not yet drawn any contingency plans, but up we anticipate doing so

19%

21%

25%

21%

21%

We have drawn up contingency plans but not implemented them yet

12%

16%

14%

17%

17%

We are currently in the process of drawing up contingency plans

11%

16%

20%

16%

20%

We have implemented contingency plans already

8%

9%

10%

10%

16%

Don’t know

2%

1%

2%

2%

0%

Have you drawn up and/or implemented any contingency plans for Brexit yet? (selected sectors)

Construction

Financial and insurance

ICT

Manufacturing

Professional, scientific and technical services

Other services

We do not anticipate drawing up nor implementing any contingency plans for Brexit

54%

59%

41%

31%

52%

52%

We have not yet drawn any contingency plans, but up we anticipate doing so

20%

14%

15%

29%

21%

13%

We have drawn up contingency plans but not implemented them yet

9%

9%

19%

14%

7%

14%

We are currently in the process of drawing up contingency plans

3%

8%

14%

22%

12%

10%

We have implemented contingency plans already

11%

8%

10%

2%

8%

9%

Don’t know

3%

3%

2%

3%

1%

2%

 When does your (primary) organisation intend to begin drawing up contingency plans?

Total

Immediately

0%

In the next 3 months

8%

In the next 3-6 months

13%

When the withdrawal agreement is finalised

36%

When the transition period begins

2%

When new trade/economic arrangements with the EU are clear

36%

Other (please specify)

3%

Don’t know

2%

















Why do you not expect to carry out any contingency plans for Brexit?

Total

I do not expect Brexit to impact my organisation

49%

We will make any adjustments after the new relationship between the UK and EU becomes clearer

42%

Other (please specify)

7%

Don’t know/Prefer not to say

3%


Has your (primary) organisation looked at relocating or co-locating operations to the EU in anticipation of Brexit?

Total

Subsidiary in EU

We have not considered moving any operations in connection with Brexit

63%

25%

It will depend on the outcome of negotiations between the UK and EU

11%

10%

We are actively considering moving operations to the EU in anticipation of Brexit

8%

10%

We already had offices/operations in the EU prior to the referendum

7%

35%

Other (please specify)

5%

5%

We have already moved or are in the process of moving operations to the EU in anticipation of Brexit

3%

10%

Don’t know

2%

0%

We were already opening offices in the EU regardless of Brexit

1%

4%


Notes:

Does your (primary) organisation currently trade (import and/or export) internationally?

Yes, with the EU only 10%
Yes, with non-EU countries only 4%
Yes, with both EU and non-EU countries 53%
No, my organisation currently only sells/trades domestically 32%
Don’t know 1%

What kind of wider business links, if any, does your (primary) organisation have to the EU? This goes beyond normal trade ties.

Export goods to EU country/countries 22%
Export services to EU country/countries (includes having EU-based clients) 41%
Import goods from EU country/countries 24%
Import services from EU country/countries 18%
Employ individuals from other EU country/countries 36%
Subsidiary/Joint venture/Local branch/Franchise (or similar) in other EU country/countries 13%
Benefit from EU funding (directly or indirectly) 17%
My organisation is the UK arm/branch/subsidiary (or similar) of an EU-based company 5%
Part of a supply chain with UK companies which trade with the EU 17%
Other (please specify) 5%
My business has no links to the EU 20%
Don’t know 1%

Contact Press Office

Donjeta Miftari, Head of Communications  

020 7451 3285


Euan Holmes, Press Officer

020 7451 3280


Press office