Stark warning for SMEs in no-deal Brexit scenario

While Britain’s two major political parties lick their wounds after the humiliation in local elections, businesses continue to remain concerned about Brexit’s eventual outcome.
A no-deal Brexit could see small businesses struggling to survive, experts have warned. The statement was made by Fiona Twycross, chair of the London Assembly EU exit working group. The forum was set up last year by Mayor of London Sadiq Khan to look at the impact a no-deal Brexit could have.
Speaking about the potential implications for the capital city, Twycross said big businesses “probably have contingency plans” for the event of a no-deal scenario. But she added: “From what we have seen, small businesses are not about to do the same. Many small businesses simply don’t have the resources available to keep stocks.”
She further added: “Small businesses could be vulnerable, and many could struggle with even a few days disruption. If there is a no-deal we could see small businesses struggle to survive. They can’t put resources in place like big businesses.” Twycross said she spoke to one small food owner who said it would be “impossible” for them to plan for all Brexit “eventualities”.
Speaking more broadly about Brexit, she said: “It involves large amounts of secrecy and politicians ‘jockeying’ around for senior positions, which is hampering civil servants doing their job. Without doubt it is the most complicated constitutional issue in our lifetime.”
It was also revealed by the associate director, Joe Owen, at the Institute for Government — an independent think- tank — that there are currently about 14,500 government officials working on Brexit. Owen, who is managing research into Brexit for the think-tank, said it is likely the number is going to increase. Tweeting about his comments, Liberal Democrat Assembly Member, Caroline Pidgeon said it is a “waste of public money, time and energy”.
In some quarters there has also been optimism for London businesses who have been encouraged to be cautiously optimistic. A panel of experts recently held discussions about life after Britain’s exit from the EU. Hosted by London Chamber of Commerce, executives from a wide range of sectors took part in the discussions.
Keynote speaker Rajesh Agrawal, deputy mayor for businesses, began by declaring that Brexit could lead to a “lost decade of growth”. But while the panel agreed that the uncertainty surrounding Theresa May’s negotiations with her EU counterparts was the primary driver of fear among firms, the general attitude towards Brexit was that there was much to look forward to as to be wary of.
That stance was supported with data presented by Oliver Wright, managing director of polling organisation ComRes, who revealed that for many metrics opinion was still split down the middle.
A survey conducted on the perceptions of Brexit showed that benefiting from trade deals with nations outside the EU is seen as Britain’s greatest opportunity across the board. This is countered by the risk of increased cost to trade and reduction in access to the continent, something which 76 per cent of all councillors quizzed listed as their greatest apprehension.
Attending the debate was Professor Tony Travers, London School of Economics director who said a meaningful discussion on migration was key to progressing the current stalemate, something that he says couldn’t be done with Theresa May in office. “Once she is gone, I think it will be possible to move on.” He went on to say that a no deal scenario would at least provide “one type of certainty. The earlier all that gets sorted out, the uncertainty ends sooner.” Director of corporate affairs, at London City Airport, Liam McKay, also attending the meeting, was unwavering in his belief that London would maintain its position as the world’s leading city, referring to it as the “vanguard of change and culture”.
He said: “I know events in the news appeal to the pessimistic British psyche. But we had growth last year and that will continue into the next decade. There is demand here. We have a brand, people want to champion us.
However, International Energy Agency’s senior counsel, Victoria Hewson did issue a warning: “Even if a deal (with EU) is passed don’t be complacent about what it gives. If we go into a backstop situation (for Ireland) it is not friction-less trade — it is a customs union; that’s not far from no deal and we’re not out of the woods.”
(The author is our foreign correspondent based in the UK. He can be reached at andyjalil@aol.com)