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A fifth of businesses surveyed say they will cut investment if there is a ‘no deal’ Brexit while 20% will move part or all of their business to the EU and 18% will cut recruitment, according to a survey by the British Chambers of Commerce which shows 62% of firms still haven’t completed a Brexit risk assessment.
The survey of around 2,500 firms found larger firms and those who are internationally active are the most exposed to the ramifications of ‘no deal’. 28% of firms with over 50 employees and 24% of those who export or import internationally say they would cut investment plans.
Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:“Businesses are clear that reaching a deal with the EU, which addresses the future terms of trade and provides certainty, must be the government’s number one priority.
“Our evidence is clear – failure to reach a political agreement would have real-world consequences, with significant decreases in both investment and recruitment. Larger firms and those active in international trade would suffer the most from a disorderly and sudden exit from the EU, but there will be impacts across the board.
“Most concerning of all, a materially significant number of businesses are considering moving part or all of their operations to the EU in the event of ‘no deal’. Government must act urgently and decisively to get a comprehensive deal done. They also need to use the levers they have, such as the upcoming Budget, to ensure they provide the right conditions for growth at home.”
The survey also reflects a huge disparity between the preparations of the largest companies and their smaller counterparts. 69% of micro firms (those with 1-9 employees) have not completed an assessment on the impact of Brexit, compared to 24% of firms with over 250 employees.
With six months to go until the UK leaves the EU, the BCC has found that many SMEs are either awaiting more clarity before they act, or are suffering from ‘Brexit fatigue’ and have switched off from the process because they don’t believe they will be affected.
Marshall added:“Too many businesses across the UK are still not ready for Brexit. Many smaller firms don’t have the capacity to scenario plan, don’t think they’ll be affected, or have simply switched off from the process altogether.
“With six months to go until the UK’s planned departure, firms still don’t have answers from government to the most basic questions about future trading conditions. With so much still unclear, a transition period is vital to allow all firms the time to acknowledge and prepare for change.”