IoD: Covid-19 would ‘magnify’ impact of no-deal Brexit for business
Business leaders fear a potential double hit from Covid and no-deal Brexit, new figures from the Institute of Directors reveal.
In a survey of almost a thousand company directors conducted in late September, the majority said that the pandemic would magnify the impact of a no-deal Brexit on their organisation, while less than one in 10 thought the reverse.
Just under half of respondents indicated they weren’t yet fully prepared for the end of the transition period, with nearly a quarter of respondents reporting that their company may not be ready in time. Over a fifth of those polled said they were fully prepared, with 28% reporting they didn’t expect Brexit to affect their organisation.
Some of the most common actions taken to prepare for Brexit included building up cash reserves, which over a third of respondents had already done. Stockpiling could be set to rise, as 12% said they intended to do so. Concerningly, many firms still needed to obtain EU licences and authorisations.
The IoD urged both sides of the negotiations to work constructively towards a deal, and called on the UK Government to consider fiscal support to aid small firms’ Brexit adjustment. A phased implementation of changes would also help businesses to adapt.
Malcolm Cannon, national director of IoD Scotland, said: “Business leaders are facing a myriad of challenges at the moment, with many just aiming to survive the current climate.
“However, it is vital that leaders start to prioritise Brexit preparations. As this survey has shown, a large number of our members are not prepared for the transition.
“While financial support from Government would be welcomed, so too would clarity around changes to rules and regulations. Without this information, businesses will have no choice but to plan for all eventualities, which distracts from the day to day focus on survival.”
Allie Renison, senior policy advisor at the IoD, said: “The prospect of no deal would be daunting enough, let alone dealing with it in the middle of a pandemic. These disruptions won’t cancel each other out, if anything they would compound the pain for British businesses.
“When it comes to preparing for Brexit proper, directors’ hands have been tied by a number of constraints and competing pressures. Reacting to the pandemic has taken up so much of business leaders’ time and energy throughout the year. On top of this, much of the information companies need is still subject to negotiations.
“Brexit adjustments will further add to businesses’ cashflow challenges in the months ahead. The Government must look to how it can smooth that process. Financial support as seen in other countries, whether through vouchers to help access advice or through extending tax reliefs to facilitate that adjustment, would give small firms a much better chance of coping.”