The Institute of Directors has urged the Government to prioritise a reciprocal agreement with the EU on movement of people. Almost two-thirds of company directors described retaining a preferential deal after free movement ends as ‘very’ or ‘somewhat important’ to their organisation, a new poll of 750 business leaders revealed.

The survey also found the level of those feeling ‘very’ prepared for a no-deal Brexit was 14%, almost unchanged since December. However, there has been a slight uptick in overall preparedness from 9 months ago, with a rise from 34% to 41% in the share who feel ‘somewhat’ prepared. A clear majority of IoD members anticipate such an outcome would have a negative impact on their organisation, even among businesses who feel ‘somewhat’ prepared.

Contingency planning has picked up slightly since May, and the proportion of directors who don’t anticipate drawing up any plans has dropped by a quarter (12 percentage points) to 37%, while the fraction that have implemented such plans remains stable at 8%, unchanged since October last year.

Stephen Martin, Director General of the Institute of Directors, said:

“While the Government may be ending free movement as we know it, a preferential deal with the EU on what replaces it simply must be on the table. The principle of treating all countries equally is laudable, however in practice our close geography and interwoven supply chains make continued access to EU talent an urgent matter for British businesses. This is not an unusual approach, as is reflected in the Common Travel Area, the Nordic passport union and the trade accord between Australia and New Zealand – to name but a few examples.

“Access to our labour market is no doubt attractive to other countries, and it makes sense that this should factor into negotiations as the UK seeks access to the European market. But the Prime Minister must keep in mind the benefits a deal would bring British firms too. The EU is not only our largest trading partner, but also the place where IoD members report the most recent export growth for their business. It’s also where they are most likely to begin their exporting journey.

“It goes without saying that a no-deal outcome would have a significant impact on many businesses, and as crunch time in the negotiations is looming, our politicians must work hard alongside the EU to avoid it. The truth is still, however, that firms must be ready for a range of possible outcomes. We’ve seen an uptick in preparations – but there’s still a long way to go.”