IoD: ‘Businesses facing ‘impossible situation’ amid Brexit impasse’

The Institute of Directors has called on the UK and EU to compromise to chart a way forward on Brexit while urging both to improve no deal planning efforts, as newly published survey figures display the ‘impossible situation’  facing business leaders.

A clear majority of IoD members have repeatedly expressed concern that a disorderly Brexit would hurt their organisation. Faced with choosing between this and a further Article 50 extension in a summer poll of 950 business leaders however, respondents were slightly more considered. A slim overall majority (51%) said that no deal would be more negative for their organisation, though this was significantly above the 32% who believed further delay could have a worse impact.

With no deal still a possibility in a few weeks’ time, the IoD has renewed its call for targeted financial assistance to help small firms’ Brexit preparations, with new analysis underlining that directors of smaller organisations were notably less likely to feel fully prepared than their larger company counterparts.

Nearly a third of IoD members surveyed were engaging with relocation as part of their Brexit contingency planning, with 14% indicating they had already moved operations or were in the process of doing so. By comparison, 9% of directors overall said their organisation was exploring onshoring operations to the UK in connection with Brexit.

Commenting on the figures, Allie Renison, Head of Europe and Trade Policy at the Institute of Directors, said:

“Firms are facing an impossible situation as they try to prepare in advance for the possibility of simultaneous sweeping changes on an unprecedented level. The idea of leaving the EU without a deal in place is certainly the bigger concern, but the prospect of repeated delays with no clear path forward is far from an appetizing prospect for enterprise.

“If Government wants the country to be ready, businesses urgently need more targeted help in the form of financial assistance to enable them to access the specialist advice they need. While efforts to inform and prepare have stepped up, there is a huge job to do and generic guidance naturally struggles to address firms’ differing unique challenges. Both the UK and its European counterparts must also step up clear communication about the full raft of changes that no deal would bring for business, as many key areas are still light on detail. After all, it’s companies who will have to make the new systems work, not just public sector infrastructure.

“Crucially, both UK and EU politicians need to strain every sinew to find a deal, extension or not. Compromise is not a dirty word, and neither side wants to be managing the fall-out of no deal for the foreseeable future. This is as much about the jobs and livelihoods of those who would be most affected as it is about politics and procedure.”