While the British Prime Minister, Theresa May, continues relentlessly to push for her deal with the European Union to be accepted by all her ministers and members of parliament, the opposition to it goes on with the likelihood of it being rejected in the vote to come in parliament.
With the UK facing the possibility of crashing out of the EU without a deal, businesses are being advised to prepare for such a scenario should that come about.
With that in mind, the City of London Corporation has told small and medium enterprises, in particular, to “accelerate their preparations” for a no-deal Brexit.
The ominous warning come with just about four months until the UK is due to leave the EU and in the wake of the latest summit in which May was unable to have further modifications made to the deal; it prompted policy chairman Catherine McGuinness to warn firms of all sizes to prepare accordingly for all possible scenarios.
“Businesses need to be prepared for all possible outcomes. The clock is ticking ever more quickly so the time for firms to ensure they are ready for a no-deal Brexit is now,” she said. “This is why we are calling on all firms, especially SMEs, to prepare for a possible no-deal and all the implications that might have for their business models.”
McGuinness went on to say: “Larger businesses have been planning for some time to ensure they can serve their customers even in a no-deal scenario, but it is concerning that many smaller organisations may not yet have realised the full impact.”
The British Chamber of Commerce (BCC) recently conducted a survey that found a huge disparity between the preparations of the largest companies and their smaller counterparts.
A total of 69 per cent of micro firms (those with one to nine employees) have not completed a Brexit risk assessment, compared to 24 per cent of firms with over 250 employees.
The City of London is home to 23,580 businesses, with 99 per cent of these firms classified as SMEs. There are around 1,200 new start-ups in the financial district of the capital every year.
The BCC has put together resources in a bid to help businesses prepare and undertake a ‘healthy check’. The website’s Business Brexit Checklist also seeks to help companies consider the changes that Brexit may bring, and help to plan at both operational and board level.
McGuiness added: “A no-deal Brexit is not in the interests of either the UK or the EU.” In preparing for a no deal situation, firms should be in earnest about it and be willing to embrace and make it work. For most firms —because most of them fear no-deal — there is every possibility that they could be pleasantly surprised. People approaching no-deal from a position of reluctant but stoic inevitability should instead willing accept it; they should look for positives and the opportunities.
Director of communications at Global Britain, Brian Monteith says that faced with a possible no-deal situation, the first thing the government must do is to expect it and work flat-out towards it. He says this is crucial for the following reasons.
First, if no-deal scars some of the markets and discounts sterling too much, it has to be ensured that the chancellor’s Brexit defence fund is strong to cope with business tax cuts which will maintain competitiveness.
Monteith said the government will have to convince the public that the £39bn Brexit bill saved from Brussels can cut VAT and used domestically to improve various services and facilities. It would help in employing more teachers, doctors, nurses and police where funds are lacking at present. Firms on both sides of the channel have not yet started training staff for necessary changes, because they have been waiting on instructions from the politicians about what to expect from the negotiations.
Firms should now get on with training and preparing for a no-deal and in that situation the EU and Ireland will have to be informed that a hard border will not be established because under the World Trade Organisation (WTO) rules there will be no need for one if existing technology is used and random inspections within 20km — as is already in existence.
Monteith points out: “We need to accept that no-deal is better than being told what our country (Britain) should do without us having a say.” (The author is our foreign correspondent based in the UK. He can be reached at andyjalil@aol.com)
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