Responding to the Prime Minister’s statement on the progress of Brexit negotiations, Allie Renison, Senior Policy Advisor at the Institute of Directors, said:
“Few would doubt that getting ready for no deal in the middle of a pandemic will be a Herculean task for many businesses. Our figures show that most directors think that Covid will magnify the impact of no deal. It’s tied their hands throughout the year and put immense pressure on cashflow, and will continue to limit bandwidth in the months ahead.
"To help businesses prepare, Government must work closely with directors to aid their planning, providing information as soon as it comes to light. Financial support for small firms in particular should be stepped up, whether through vouchers or tax reliefs.
“While there may be opportunities on the other side of transition, it remains imperative to minimise the risks in getting there to maximise any future benefits. Both sides must keep their eyes on the prize of a deal, which is in everyone's best interests."
In a recent IoD survey, just over a fifth of company directors said their organisation was fully prepared for the end of the transition period, with almost a quarter not expecting to be ready by the end of the year.
The majority of respondents said that Covid-19 would exacerbate the impact of a no deal outcome.
Full results:
958 respondents, conducted between 11-30 September 2020
Thinking with your organisation in mind, do you think the impact of coronavirus would affect the impact of a no-deal outcome between the UK and EU?
The impact of coronavirus will exacerbate/magnify a no-deal outcome | 54% |
The impact of coronavirus will mitigate the effect of a no-deal outcome | 9% |
No impact either way | 30% |
Don't know | 7% |
Have you already undertaken, or plan to undertake, any of the following contingency measures?
| Already undertaken | Plan to | Not planning to |
Stockpile goods/products/parts | 15% | 12% | 73% |
Build up cash reserves | 37% | 13% | 50% |
Relocate or open up operations in the EU for trade/customer/client servicing continuity | 16% | 8% | 75% |
Secure additional warehousing space | 5% | 3% | 92% |
Have a customs agent or other related intermediary | 12% | 7% | 81% |
Obtain necessary licences/authorisations from EU/European authorities | 14% | 14% | 73% |
Reorient/adjust my supply chain | 12% | 9% | 79% |
Stopped sourcing/buying from the EU | 5% | 3% | 93% |
Stopped selling to the EU | 3% | 2% | 95% |
Our organisation has been cut out of EU or UK supply chains | 3% | 1% | 96% |
Close the UK part of our business | 1% | 3% | 96% |
Transfer staff to the EU | 4% | 5% | 91% |
Transfer staff to the UK | 1% | 1% | 98% |
Open new location/business in the UK | 2% | 2% | 96% |
Which of the following statement best matches your organisation's preparedness for the end of the Brexit transition period on 31 December 2020?
Fully prepared | 21% |
More preparation to do - we will be prepared by the end of the year | 21% |
More preparation to do - not sure if we will be prepared by the end of the year | 24% |
Brexitwill not affect our organisation | 28% |
Don't know | 7% |