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Monday, July 13, 2020

Government failures on Brexit to hit businesses

The Guardian reports that company directors believe only one in four companies are prepared for Britain’s full departure from the European Union in five months time.

The Institute of Directors say manufacturing firms in particular are unlikely to be ready for the end of the transition period with a lack of clarity on rule changes a bigger impediment to Brexit preparation than the need to focus on the coronavirus pandemic:

Almost half of 1,000 company directors polled by the IoD said they were unable to prepare now for the changes needed from 31 December, with almost one in three saying they could only make adjustments once the details were clear.

A clear majority, 69% of directors, said that securing a trade deal, rather than crashing out of Europe on World Trade Organization (WTO) terms, was important for their own company. Even among directors who saw positives in divergence from EU rules, seven in 10 said a deal would be important to the economy.

The IoD argued that time to prepare was essential, regardless of the outcome of trade talks between Britain and the EU, and called for a phased implementation of any new regime.

Jonathan Geldart, director-general of the IoD, said: “With so much going on, many directors feel that preparing for Brexit proper is like trying to hit a moving target. Jumping immediately into whatever comes next would be a nightmare for many businesses.

“A commitment to some form of reciprocal phasing-in of changes once clear is a long-standing ask from our members, and the benefits would be significant. At a time when government is rightly straining every sinew to help firms deal with widespread disruption, it would be counterproductive not to seek to minimise it at the end of the year.”

In many ways the outcome of this survey is no surprise. The government itself is drifting with no real idea of how to resolve the current impasse and a no deal Brexit is looking more and more likely. It will be the economy that will suffer for their complacency.
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