Neither UK nor EU ready for no-deal, finds contingency planning study

A report from the Confederation of British Industry has found the both the UK and the EU are not prepared for a no-deal Brexit, despite the provisions undertaken.

The report has also highlighted how the EU is lagging behind the UK in seeking to prevent the worst effects of a no-deal, and although business have already spent billions on contingency planning for no-deal, they remain hampered by unclear advice, timelines, cost, and complexity.

The report also shows larger companies, particularly those in regulated areas such as financial services, have well-thought contingency plans in place, although smaller firms are less well prepared.

The CBI is using the report to urge to UK and the EU to capitalise on the appointment of a new Prime Minister to word towards an agreement on a deal that would be a catalyst for future growth and prosperity, as well as to step up no-deal preparations.

Josh Hardie, Deputy-Director General of the CBI, said: “Business are desperate to move beyond Brexit. They have huge belief in the IL and getting a deal will open many doors that have been closed by uncertainty.”

“There is a fresh opportunity to show a new spirit of pragmatism and flexibility. Both sides are underprepared, so it’s in all our interests. It cannot be beyond the wit of the continent’s greatest negotiators to find a way through and agree a deal.”

“But until this all becomes a reality, all must prepare to leave without one. It’s time to review outdated technical notices, launch an ambitious communications campaign for every firm in the country, and rigorously test all Government plans and IT systems.”

“The EU must come to the table and commit, to the very least, to matching the UK’s sensible mitigations. Failure to do so will hurt our economies. While the UK’s preparations to date are welcome, the unprecedented natures of Brexit means some aspects cannot be mitigated. We can reduce but not remove the damage of no-deal.”

“It’s not just about queues at ports, as the invisible impact of severing services trade overnight would harm firms across the country. Preparing for no-deal is devilishly difficult. But it is right to prepare. The CBI will continue to support its members to get ready for no-deal, as It has been doing for over a year, but it will need all parties to raise their game.”

Meanwhile, the SMMT has written a letter to new Prime Minister Boris Johnson, asking him to rule out a no-deal Brexit all together.

The letter, written by Chief Executive Mike Hawes, said: “A no-deal Brexit presents an existential threat to our industry. We are highly integrated with Europe, and a no-deal Brexit would result in huge tariff costs and disruption that would threaten production, as well as further undermining international investors’ confidence in the UK.”

“We need a deal with the EU that secures frictionless and tariff-free trade. No-deal Brexit is simply not an option.”

With the threat of no-deal still in the air, the Chief Executive of Vauxhall owner PSA has said it could move all production of its Astra away from the UK.

Carlos Tavares told the Financial Times: “Frankly I would prefer to put the Astra in Ellesmere Port, but if the conditions are bad and I cannot make it profitable, then I have to protect the rest of the company and I will not do it.”

This could lead to the closure of the site, threatening 1,000 jobs.